Recent analysis by LendingClub Corp. might reinforce why the debt-to-income portion of your auto finance company’s underwriting guidelines could be dinging applications more often nowadays — especially if the individual is leaning heavily on their credit cards.

LendingClub’s research on personal finance trends showed more than a third of Americans couldn’t manage their finances without a credit card. LendingClub conducted a national survey of 1,013 consumers from May 13-21 to understand the trends and opinions on credit card usage and debt management.

Nearly a quarter (23.6%) of respondents admit they don’t know their total credit card debt. And, while most consumers use their credit cards for convenience or rewards (and pay off their balance each month), a sizeable portion of the population is using their cards to make ends meet amid rising costs, according to LendingClub.

Experts said this cohort is more concerning because they are loading debt at — unbeknownst to many of them — historically high floating interest rates.

LendingClub’s survey also showed almost half (47.1%) of Americans are unaware of the current APR on their credit cards. Of the 52.9% who say they do know their APR, a third didn’t know that their rate is directly tied to the prime rate, which fluctuates with Federal Reserve interest rates.

In fact, the survey determined nearly half of all Americans (49.5%) are unaware that their credit card APR automatically rose by over 5 percentage points following Federal rate increases between March 2022 and July 2023.

Experts said these findings highlight a lack of consumer awareness about the pace of credit card rate changes, a fundamental misunderstanding of how rates are calculated, and an inability of consumers to easily find and track their current rate.

“Credit card balances reached its highest level in history at $1.14 trillion, with average interest rates of 22.76% being the highest we’ve ever seen,” LendingClub chief customer officer Mark Elliot said in a news release. “Unfortunately, many consumers are unaware of these rising costs, and credit card companies are happy to keep it that way. This lack of transparency makes it even more challenging for consumers to manage their finances and get out of debt.

“The need for clearer communication from credit card companies is more pressing than ever,” Elliot continued. “By empowering consumers with knowledge, we can help them understand their debt burden so they can make more informed financial decisions and develop debt management strategies, especially in a high-interest rate environment. Debt itself isn’t inherently bad; in fact, we know from our own research that many are comfortable with — and even empowered by — carrying debt. The real issue is that credit cards are designed to do better when the cardholder does worse.

“Frankly, the deck is stacked against consumers. One way we’re working to level the playing field for our members is by simply raising awareness about the debt they’re carrying and the true cost of that debt — a small but important first step toward helping them avoid pitfalls,” Elliot went on to say.