A significant proportion of Americans who have gone through a divorce attribute their separation to credit card debt and hidden financial activities, according to a new survey.
The findings of Debt.com's third annual Debt and Divorce survey, which offers a comprehensive look into how debt influences marital breakdowns, point to a concerning trend of financial infidelity undermining relationships.
In the poll of 526 divorcees, one-third reported credit card debt and financial infidelity were critical factors in their divorce. About 70% of respondents who cited credit card debt as a reason for their divorce said either they or their ex-spouse had concealed debt, and 80% admitted hidden spending played a role in their separation.
“Credit card debt and out-of-control spending can pose big relationship challenges for married couples, and those challenges are made more difficult when one or both parties in the marriage are hiding spending and debt," said Howard Dvorkin, chairman of Debt.com
Individuals involved in such divorces often end up in precarious financial positions. The survey found 38% of those who ended their marriage due to financial issues took on at least $10,000 in debt subsequently, and 40% saw their credit scores plummet by more than 50 points.
Beyond financial arguments about hidden debt, 57% of participants pointed to disagreements on big purchases as a divorce factor, marking a significant increase from 42% the previous year. Nearly a quarter of respondents also blamed their financial strain on frequent dinners out and entertainment expenses.
The survey also highlighted that 37% of divorcees now find themselves solely responsible for debts that were previously shared, worsening their financial challenges in the wake of the divorce.
This personal financial turmoil mirrors a broader national issue of rising consumer debt and credit card delinquencies. Recent data from the New York Federal Reserve indicate an alarming trend, showing total U.S. household debt increased by $212 billion to $17.5 trillion in the fourth quarter of 2023.
Credit card balances also saw a significant jump, increasing by $50 billion to reach $1.13 trillion. This increase was partly fueled by a surge in December spending, adding $19.1 billion to the tally and marking a nearly 6% rise from the same period in the previous year.
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