Losing Weight and Exercising More Top Getting Out of Debt

ISLANDIA, NY – Thirty percent of Americans say that losing weight and exercising more is their top New Year’s resolution, up from 27% who said so in January 2004, according to the Cambridge Consumer Credit Index. Paying off or paying down debt was the top priority for 25% of Americans this year, down from 28% who wanted to get out of debt a year ago. The third most important priority was getting a better or more secure job (14%, down from 15% in 2004). 12% (down from 13% a year ago) want to improve their personal relationships, while 11% want to stop smoking and drinking alcohol, up from 7% in 2004.

Asked if their New Year’s Resolution was new or a repeat of 2004′s pledge, 23% say their resolution is new for 2005, 38% say it is a repeat of a goal they had for 2004 but did not accomplish, and 39% say it is a repeat of their 2004 priority even though they made some progress towards that goal over the last year.

“The results of the Cambridge Consumer Index wildcard question show that health concerns, including exercising more, losing weight, and drinking and smoking less combined to be the top resolution of 41% of Americans, up sharply from 34% last year. Meanwhile, the percentage of consumers putting debt reduction as their top priority (25%) slipped from the top spot in 2004 to second place now. This seems to be an indication that as the economy has improved, more Americans feel able to handle their debt load than they did a year ago, and have become refocused on living healthier lives, “says Jordan Goodman, spokesperson/financial analyst for the Cambridge Consumer Credit Index.

The Cambridge Consumer Credit Index is a forward looking economic indicator gauging consumer spending and debt. It is released on the fifth business day of every month to coincide with the Federal Reserve Board’s G19 release of consumer credit outstanding data.

The overall Cambridge Consumer Credit Index rose by two points in January to 65. The Index rose as Americans took on a huge amount of new debt in the past month, while their intentions for taking on more debt plunged in the next month and slipped slightly for the next six months. The “Reality Gap,” which is the difference between the amount of debt consumers say they will pay off in the next month versus the amount of debt they actually paid off a month later, widened by 13 percentage points from December to an all-time record high of 20. A month ago, 74% of Americans planned to pay off debt, while a month later only 54% actually did so.

According to Chris Viale, Acting President and C.E.O., Cambridge Credit Counseling Corporation, “The Cambridge Consumer Credit Index’s survey results for consumers’ New Year resolutions indicate that a substantial percentage of consumers (25%) say eliminating debt is a major concern in their lives. Getting out of debt remains a top priority and good intention for people as they begin the New Year. At Cambridge Credit, we encourage Americans that it is all-important to become educated about their finances and to use credit wisely.”

In conjunction with the Index, the Cambridge Credit Counseling Corp. is releasing its monthly survey of people who have called in for credit counseling services over the past month. Cambridge representatives ask callers for the primary reason that they found it necessary to get help with their debts now. Of the 273 people who answered, this was the order of their responses:

1. I am frustrated with high bank rates and fees (35.2%)

2. My income has been reduced from a lower salary, less overtime or layoff (32.6%)

3. I want to improve my ability to achieve future financial goals like buying a house or saving for retirement (11.4%)

4. I got into too much debt by overspending (6.6%)

5. Other (4.4%)

6. My lack of financial education caused me to take on too much debt (4.0%)

7. Large medical expenses forced me to take on huge debts (3.7%)

8. Recently divorced or widowed (2.2%)

For more information on the survey see http://www.cambridgeconsumerindex.com/index.asp?content=client_survey.

These findings are the result of monthly nationwide telephone poll of 800+ adults conducted by ICR/International Communications Research in the past week, sponsored by the Debt Relief Clearinghouse, Ltd. The Cambridge Consumer Credit Index is a forward looking economic indicator gauging consumer spending and debt. It is released on the fifth business day of every month to coincide with the Federal Reserve Board’s G19 release of consumer credit outstanding data. For more information contact Paramjit Mahli at pmahli@cambridgeconsumerindex.com or 631-786-6450 or the Index website at www.cambridgeconsumerindex.com.