The Impact of Inflation: Prime vs Non-prime American Households

Rhea-AI Summary

Elevate’s Center for the New Middle Class has published a white paper detailing the financial strain inflation is placing on American households, particularly comparing non-prime and prime credit consumers. Key findings reveal a 10% increase in non-prime households feeling significant pressure from rising gas prices, now at 35%. Additionally, 31% of non-prime households report high financial strain from healthcare costs, up from 21% pre-pandemic. The report underscores the limited credit access for non-prime consumers during these challenging economic times.

Positive

• Increasing relevance and visibility of Elevate's research on household financial health.
• Identification of significant financial strain on non-prime households may drive targeted financial products.

Negative

• Rising gas prices causing financial strain for 35% of non-prime households indicates worsening economic conditions.
• Healthcare costs impacting 31% of non-prime households could lead to increased financial instability.

Gas prices, healthcare costs are fueling financial strain for non-prime households

FORT WORTH, Texas--(BUSINESS WIRE)-- Today, Elevate’s Center for the New Middle Class (CNMC) released a white paper exploring the effects of rising inflation on American households, and specifically how the rising prices are impacting Americans with prime (FICO 700 and above) vs. non-prime (FICO sub-700) credit scores. Both prime and non-prime households are feeling the effects of higher prices – notably rising gas costs, but inflation is in some cases affecting the groups differently: non-prime households are especially feeling the financial strain.

"Everyday American households are already under substantial financial stress from ordinary expenses," said report author and CNMC Executive Director Jonathan Walker. "It is unclear how much more the new middle class can be squeezed with the rise of inflation. When times are tight, they do not have the same access to credit that their prime counterparts have to navigate unexpected expenses."

Key findings from the CNMC report include:

• Both prime and non-prime respondents are feeling the effect of higher gas prices. Compared to pre-pandemic levels, the number of households reporting that gas prices are straining their finances rose 10 percentage points for each cohort. 35% of non-prime consumers now say gas prices are causing "a lot" of strain in their month-to-month finances, versus 26% for prime respondents.
• Rising healthcare costs are affecting non-prime households more than their prime counterparts. The number of non-prime households that say out-of-pocket healthcare costs are causing "a lot" of strain on their month-to-month finances now stands at 31%, compared to 21% pre-pandemic. The corresponding number for prime respondents rose only three points from pre-pandemic levels, from 20% to 23%.

Read the full report here to gain a comprehensive understanding of these findings and more.

About the Research
The tracker index is a longitudinal study measuring all aspects of American household finances. It collects responses from prime and non-prime consumers every month and has been running since September 2018. This analysis included 20,370 completed surveys of a questionnaire which measures over 50 variables related to personal and household finances.

About Elevate’s Center for the New Middle Class
Elevate’s Center for the New Middle Class (CNMC) is a non-profit research group sponsored by Elevate Credit, Inc. (NYSE: ELVT). The CNMC’s mission is to research the challenges, behaviors, and attitudes of American household finances, especially the impact of credit constraint on households’ financial resilience.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220330005233/en/

Elevate

Investor Relations:

Solebury Trout

Sloan Bohlen, 817-928-1646

investors@elevate.com

Media Inquiries:

Solebury Trout

Laurie Steinberg, 845-558-6370

lsteinberg@soleburytrout.com

Source: Elevate Credit, Inc.

FAQ

What are the key findings from Elevate's recent report on inflation?

The report highlights that 35% of non-prime households feel significant strain from gas prices and 31% from healthcare costs.

How has inflation affected non-prime households according to Elevate's white paper?

Inflation has led to greater financial strain on non-prime households, particularly from rising gas and healthcare costs.

What percentage of non-prime households report strain from gas prices?

35% of non-prime households report significant financial strain from gas prices.

How does the healthcare cost impact non-prime households compared to prime households?

31% of non-prime households report significant strain from healthcare costs, compared to only 23% of prime households.

When was the research conducted for Elevate's report?

The research includes data collected since September 2018, with 20,370 completed surveys.