In this study, we examine and compare the associations between problematic debt holding and financial wellbeing of the United States consumers before and during the Covid-19 pandemic. Problematic debt refers to credit card debt, payday loan, pawnshop loan, and auto title loan in this paper. Using data from the 2019 and 2020 Survey of Household Economics and Decisionmaking (SHED), results suggest that problematic debt is negatively associated with financial wellbeing either before and during the pandemic. Moreover, the negative association is greater after the outbreak of the Covid-19 pandemic than before. In addition, we also examine the role of two coping mechanisms, financial self-efficacy and financial capability (measured by financial knowledge and financial behavior). Moderating analysis suggests that financial self-efficacy and desirable financial behaviors exhibit positive moderating effects in the association between problematic debt and financial wellbeing either before and during the pandemic, and the moderating effects are also greater during the pandemic than before. However, the positive effects of financial knowledge only appear before the pandemic rather than during the pandemic. The results of this study have implications for improving consumer financial wellbeing.

Accepted Oral Presentation