New Poll Finds Active Duty Military Households Experience Significantly Higher Rates of Financial Hardships than Non-Military Households
-Majority of Military Households Live Paycheck-to-Paycheck Every Month and Have Been Denied Access to Credit Due to Military Lending Act-
ARLINGTON, Va. (January 15, 2020)— In a time that our country is preparing to send over more troops to the middle east, the financial standing of these troops is an important factor for them and for their families. According to a new survey conducted by HarrisX on behalf of the Online Lenders Alliance, nearly half (47 percent) of Americans use their entire paycheck to cover expenses with almost nothing left over in savings for at least half of the year, with a third (33 percent) doing so every month. Among active duty military households, this number is significantly higher, with 68 percent living paycheck-to-paycheck at least every other month and a majority (54 percent) doing so every month.
The findings from this survey are consistent with previous studies released by Harris and the United States Military Academy West Point. The survey also found that active duty military households have a higher likelihood of considering different sources to cover an unexpected expense of $400, including paying bills late (35 percent for active duty military, 11 percent for all Americans), pawning a valuable item (34 percent for active duty military, 10 percent for all Americans), overdrafting a bank account (32 percent for active duty military, 8 percent for all Americans), taking out a short-term loan due in 30 days (35 percent for active duty military, 7 percent for all Americans), getting a pay advance from their employer (34 percent for active duty military, 7 percent for all Americans), or taking out a loan from an online or non-bank lender (31 percent for active duty military, 6 percent for all Americans). Active duty military households are also more than twice as likely to hold debt from different sources, including banks/credit unions, family/friends, or an online lender or non-bank lender.
Furthermore, borrowing restrictions imposed as a result of the Military Lending Act (MLA) have resulted in a majority (51 percent) of active duty military households being denied credit.
“This survey shows in stark terms exactly how damaging the Military Lending Act has been to our active duty military households and how much it has added new stressors to their unique financial situations,” said Mary Jackson, CEO of the Online Lenders Alliance. “In almost every category, active duty military households are worse off financially than the American population at large, and it is unconscionable that some are now looking to force the MLA’s restrictions on the wider population.”
“By eliminating the ability for lenders to provide safe and reliable installment loans or lines of credit at a cost commensurate with borrower risk, credit choices are forced out of the market,” Jackson continued. “This leaves consumers with even fewer options when a need for credit arises.”
The survey was conducted online within the United States from November 4-7, 2019 among 1,000 adults by HarrisX. The sampling margin of error for the poll is ± 3.1 percentage points. The results reflect a nationally representative sample of adults, and were weighted for age within gender, religion, race, and income where necessary to align them with their actual proportions in the population. For active duty military households, the sampling margin of error is ± 4 percentage points, and the results reflect a nationally representative sampling of households that have an active duty military member in them. Results were weighted for race, marital status, and children in the household where necessary to align them with their actual proportions in the population.
For more results from the survey, click here.