Credit Turns From Status Symbol to Stress Test

For millions of Americans trying to balance budgets, credit remains a financial lifeline and a psychological minefield. But even for those who appear to have financial security, managing revolving balances, rate hikes and everyday spending continues to test household resilience.

PYMNTS Intelligence’s “Consumer Credit Economy: Strategy vs. Spontaneity—Navigating the Great Credit Divide” report, created in collaboration with i2c, finds that credit is strategic for planned purchases and reactive for unexpected expenses. Yet, the perception gap between credit reality and consumer confidence runs deep. Many households, including high-income ones, harbor doubts about their creditworthiness despite healthy financial profiles.

“Many Americans believe they would have little or no chance of being approved for a new credit product, even though actual approval rates show otherwise,” the report says.

That uncertainty extends into upper-income brackets, where 33% of consumers earning more than $100,000 annually believe they would probably or certainly be denied for a new credit card application.

In reality, denial rates are modest. Among respondents without an active credit card, just 15% said they had ever been rejected for their desired limit. High earners may have strong FICO scores and ample liquidity, but they remain cautious about tapping new credit lines, often conflating economic uncertainty with personal risk.

The report finds that 52% of consumers with more than $100,000 in annual income restrict credit use mostly or completely to planned expenses, compared with 56% of those earning $50,000 to $100,000.

Among upper-income households, credit often bridges timing gaps or captures card rewards, even on routine supermarket trips. At the same time, six-figure earners show the same defensive behaviors seen lower down the income ladder, the report reveals.

More than half of overall respondents expressed interest in cards that automatically convert large purchases into installment plans, while almost 60% said they would like cards that allow them to choose monthly between earning rewards and a lower interest rate.

That appetite extends to innovative hybrid products. Roughly half of consumers, including young and middle-aged professionals, show interest in cards that combine debit and credit functionality or let them align due dates with paychecks. Such flexibility appeals to those juggling bonuses, variable income or stock-based compensation, typical traits of high-earning households.

High earners’ cautious stance is not purely economic but cognitive. The report finds that “perceptions… influence outcomes,” as consumers often “self-deny” by never applying in the first place:

• For lenders, that misconception limits engagement among a potentially profitable segment.

• For consumers, it means forgoing competitive rates and rewards that could strengthen their overall financial position.

Credit, in short, has become status-neutral and situational. For high earners, that mix of caution and control may define the next phase of America’s credit economy, but by aligning products with consumers’ evolving comfort levels and preferences, issuers can turn hesitation into engagement — and loyalty.

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