Survey: Medical Debt Forcing Americans Into Minimum Credit Card Payment Only
Medical debt is disastrous for almost anyone’s finances. When you’re saddled with debt and bills because you got sick or injured, it means that you’ll soon start getting a lot of mail and, eventually, phone calls if those bills are not paid. It doesn’t even matter in some respects if you have health insurance or not – it certainly does help – but for a lot of people even the remaining costs are all but untenable when trying to fit these payments into a budget. So what does this have to do with a minimum credit card payment?
According to a recent survey done by Discover, medical debt and the minimum credit card payment are becoming more intertwined as time passes. They are especially more related since last year, based on the results of the survey. If you find yourself being able to make only the minimum credit card payment because of medical debt or any other reason, not only should you keep reading, but keep in mind that you’re far from alone.
About the Discover Survey
Discover – yes, that Discover, the credit card company – commissioned a survey of 1,521 American adults that was completed by Dynata. The survey was done in May of 2022. The survey asked respondents to evaluate seven different financial circumstances that are common with people and to compare them to one year ago. Basically, the circumstances involved people having to stop paying for or saving for something.
The percentages of people who had to stop paying or saving for something in 2022 as compared to 2021 rose in four categories, remained the same in one and went down in two.
See below:
| Financial commitments delayed due to medical debt | 2022 | 2021 |
| Stop spending on dining and entertainment | 48% | 35% |
| Skip vacations | 42% | 37% |
| Pay the minimum payment, and no more, for my credit cards | 42% | 23% |
| Skip adding to my emergency savings | 36% | 28% |
| Skip saving for retirement | 32% | 32% |
| Stop paying other bills | 27% | 37% |
| Stop saving for my child’s college | 14% | 20% |
The survey revealed that more people in 2022 as compared to 2021:
- Stopped eating out and going out
- Did not go on vacation
- Paid only the minimum credit card payment on their accounts
- Stopped saving money for emergencies
These are not positive indicators, as they reveal that people are not only dealing with having less cash on hand and coming in the door, but they are also hanging onto the cash that they are seeing more tightly because they are dealing with enormous amounts of medical debt. If these percentages reflect the entire American populace, then medical debt is inflicting a serious amount of damage on the American economy overall.
It’s Not Just a Minimum Credit Card Payment Problem
Credit cards come with spending limits, and too many people across the country already know all about that these days. Medical debt does not, so no matter how much you owe you can still be seen in certain situations if you need help. However, almost like making the minimum credit card payment, Americans seem to have some limits in place when it comes to their medical spending.
The survey further revealed that an alarming number of people are putting off additional medical care because they are already carrying medical debt. See the sacrifices people are making below based on the percentage of survey respondents who are putting off each of the medical needs:
- Seeing a specialist – 52 percent
- Getting seen for a sickness – 41 percent
- Undergoing treatment plans recommended by a doctor – 31 percent
Finally, 47 percent of the respondents stated that it would take more than a year to pay down their current load of medical debt, and that’s assuming that no more debt would be incurred in the meantime.
It’s a Mess – It’s Also Not Your Fault
Medical debt is a problem for millions of people, and what we’ve seen above, as it relates to making only the minimum credit card payment on accounts and other results are the “soft” costs of carrying this debt. Overall, Americans owe nearly $200 billion in medical debt, and more than 70 percent of that debt is owed by people who owe more than $10,000 in medical bills individually.
That’s untenable on every level, and it’s also one indicator as to why it’s true that according to many statistical analyses, more than 60 percent of bankruptcies in the United States were filed largely because of unmanageable medical debt. Once again, not only does that create an enormous financial problem for people facing this situation, but it also leads to more problems from other creditors.
What Can Be Done?
Fortunately, there are things that can be done, although every individual situation is different. What most people have in common is the fact that they can negotiate with creditors, particularly holders of medical debt. These creditors and bill collectors are in many cases going to be willing to take something in the form of payment over nothing, which is what they will get in most cases when someone files for bankruptcy protection.
There may be other things that you can do as well, such as consolidate your debts to make them more manageable or even challenge the validity of some of your debt, as medical billing is an industry that’s rife with errors and other problems.
For now, an initial step you can take is to sign up for our newsletter. If the minimum credit card payment is all you can afford, whether it’s due to medical debt or for some other reason, we may be able to provide you with some ideas and strategies to put into place that could help you. Sign up below and start acquiring knowledge that will help you move forward with your financial situation instead of constantly feeling like you’re retreating.
