NEW YORK—LendingClub CEO Scott Sanborn says more than half of consumers are unaware of the interest rates on their credit cards—and among those who think they know, half are underestimating the cost, PYMNTS reported, adding the situation is creating a big opportunity for lenders.
The insight comes from LendingClub’s internal research, released as credit card rates climb into the high-20% range and essential expenses have outpaced income growth for the past two decades. Over that same period, revolving credit card balances have hit record highs, PYMNTS said.
“Add in the inflationary pressure, which doesn’t seem to be going away as fast as anyone would like,” Sanborn told PYMNTS CEO Karen Webster. “It’s putting pressure on consumers, who are managing…but things are tight.”
Sanborn said the conditions have created the largest total addressable market for personal loans that the company has seen. LendingClub estimates that 52% of Americans are currently carrying credit card debt at historically high interest rates, PYMNTS said.