The need for second — and often third — incomes is mounting, according to a top digital bank executive.
Current CEO Stuart Sopp finds almost half of the firm’s payment customers have more than one job.
“If you’re having a paycheck over the past year, 20, 25% of paycheck depositors have at least one extra job. A further 20% incremental from there have two jobs,” Sopp told CNBC’s “Fast Money” on Thursday. “They’re trying to make that money go further because of inflation.”
From DoorDash to Shopify to side businesses, Sopp finds the number is higher than prior years because money doesn’t go as far.
“Wage inflation is moderating quite substantially,” he said. “America has a sort of tail of two cities right now. Two groups: The wealthy and less affluent.”
Sopp launched Current, which provides mobile banking without monthly fees and offers secured credit cards, in 2015. It originally focused on helping medium to lower income customers. His company Current reports almost five million members.
He’s particularly concerned about less affluent consumers spiraling into debt to pay for basic necessities.
“They’re being forced into risks like risky credit cards,” noted Sopp, a former Morgan Stanley trader. “Unsecured credit cards… are not suitable for everyone.”
The Federal Reserve Bank of New York found credit card debt topped $1 trillion for the first time ever in the second quarter.
“It’s going to be way bigger this year,” Sopp said.