The LGBTQ Community Still Struggles Financially

overdraftapps report

This article is part of the Overdrafting in the United States report

“According to a recent report,” said Seth Meyers on the “Jokes Seth Can’t Tell” segment of “Late Night With Seth Meyers” in late 2017, “gay men earn more money than straight men. Because straight men work but gay men weeeeeeerrrrrkkkk.” Meyers was immediately (and jokingly) castigated by his writing staff and the world left pondering the questions at hand: Are gay men really making more money than straight men these days? And is the rest of the LGBTQ community financially better off, too?

Despite recent reports that both lesbians and gay men earn more than their hetreosexual counterparts, other studies show members of the LGBTQ community are still more likely to be poor. A June 2013 study by The Williams Institute (a think tank conducting research on sexual orientation and gender identity law and policy) at the UCLA School of Law found that though “poverty rates for nearly all populations increased during the recession, lesbian, gay, and bisexual (LGB) Americans remained more likely to be poor than heterosexual people.” Among the key findings of the study were that 7.6% of lesbian couples, compared to 5.7% of married different-sex couples, are in poverty and 14.1% of lesbian couples and 7.7% of gay male couples receive food stamps, compared to 6.5% of different-sex married couples.

OverdraftApps.com set out to learn more about American personal finance, specifically how hard Americans are beset by overdraft fees, or fees incurred when a bank charges customers for letting them use more money than they have in their accounts (either by linking their checking account to another, like a savings account, or simply fronting them the money). Having surveyed 1,009 people ages 18 to 71 from 46 of the United States (excluding Wyoming, Vermont, Alaska and Hawaii), we found both that overdrafts were quite common, and that there was a great deal of confusion around how and why they happen. As many as 46% of Americans said they had overdrafted at least once in the past year, and approximately 42% of respondents said they had overdrafted but didn’t realize it until later.

Among our objectives was looking at how the LGBTQ community was faring, 11% of respondents identifying as members. Corroborating evidence from the aforementioned studies, our survey found that, to begin with, income in the LGBTQ community is lower than that of the general population. While close to the same number of LGBTQ people (34%) and non-LGBTQ people (36%) make $25,000 to $50,000, the numbers are quite different at other income levels. Only 14% of the general population reported making less than $25,000, but exactly a fourth of the LGBTQ community, more than double the general population’s amount, reported making it. Approximately 32% of the general population reported earning $50,000 to $75,000 annually compared to 25% of the LGBTQ community. And while 16% of the general population reported earning $75,000 to $100,000, 12% of LGBTQ community reported earning the same.

Overdrafting behavior is also different in the LGBTQ community when compared to the general population. While 54% of the general population reports never overdrafting in the past year, 47% of those in the LGBTQ community can say the same. Only 12% of the general population has overdrafted between three and nine times in the past year, while 18% of the LGBTQ population has. However, when it comes to those who have overdrafted more than 10 times in the past year, there’s little difference: 5% of both communities have.

The LGBTQ community is also more informed about overdrafting, 67% of those surveyed being aware that they could opt out of the activity compared to 61% of the general population. Fittingly, less of the of LGBTQ community reported having opted into overdraft protection (32%) than the general population (39%).

What did our LGBTQ respondents do in case of an overdraft? While 58% of the general population has called to try to get their bank to reverse an overdraft fee, 52% of the LGBTQ population reported having done the same. Which may be indicative of something else we inquired about: those in the LGBTQ community were more likely to feel taken advantage of than the general population. When asked if they’ve felt taken advantage of by the system, political or financial, 61% of LGBTQ respondents said that they often feel this way compared to 51% of those not in the community.

When it comes to the current administration, as many as 90% of our LGBTQ respondents said they don’t trust the current administration to help lower bank fees, compared to 76% of those outside the community. A whopping 94% of LGBTQ respondents do not believe President Trump, specifically, will help decrease bank fees, compared to 81% of those not in the community.

Respondents were also asked if they knew they had to overdraft, was there a type of purchase they’d prefer to overdraft on? As many as 42% of the LGBTQ community prefered a transaction go through on groceries, compared to 54% of the general population. When it comes to medical expenses, 46% of the LGBTQ community would prefer to pay an overdraft fee than get declined, compared to 49% of the general population. And when it comes to overdrafting on clothes shopping, 24% of the LGBTQ community would prefer to overdraft, compared to 19% of the general population. The LGBTQ community is also more likely to take out a payday loan to cover an overdraft fee, 30% of the community having done so compared to 24% of the general population.

Finally, we asked respondents what they’d do if they found $1,000. As many as 70% of LGBTQ people said they’d responsibly put it toward debt, compared to 60% of the general population. Only 18% of LGBTQ people said they’d save it, compared to 28% of the general population. This priority of tackling debt over building savings could indicate a higher debt load among LGBTQ people.

Click here to download the PDF version of the full report.

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The LGBTQ Community Still Struggles Financially
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The LGBTQ Community Still Struggles Financially
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Our report shows how the LGBTQ community still struggles financially.
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OverdraftApps.com
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