In the summer of 2020, the Consumer Financial Protection Bureau (CFPB) released the first results from the Making Ends Meet survey. The results provide a deeper understanding of how often U.S. consumers have difficulty making ends meet and reinforces the need for voluntary protection products like service contracts, GAP, credit insurance and debt protection.
Many U.S. households are having challenges. In May 2019, over 40% reported that they had difficulty paying a bill or expense in the previous year. And with the national pandemic, it isn’t getting any easier for many families nationwide.
Challenges spanned the credit spectrum. People with lower incomes and lower credit scores were much more likely to report having difficulties, but almost 20% of respondents with incomes over $100,000 reported having difficulty paying a bill or expense in the previous year.
Unemployment and asset repair are key events. Respondents indicated that 47% had an employment event and 65% or more reported having difficulty with a bill or expense, while 68% had a household asset needing repair, 59% a major vehicle repair, and 46% or more in that group reported having difficulty with a bill or expense.
Voluntary Protection Products (VPPs) provide a financial safety net. VPPs cover many of the unforeseen events described in the Making Ends Meet survey, including involuntary job loss, disability, death, vehicle and appliance repairs, vehicle theft or total loss. VPPs cover household financial obligations, whether that’s a loan payment or a bill for repairs.
And since 34% of survey respondents said they paid late or skipped, and another 32% indicated they simply did not pay, by covering their payments, VPPs help U.S. households weather these financial shocks and protect their credit rating.