If a person is materially well-off, they feel confident about the future. However, 77% of Americans are anxious about their financial situation: when a gap arises between income and expenses and unexpected costs for repairs or medical care arise, this leads to stress. The frequency of such situations in the United States has led to the emergence of various tools that provide quick access to small amounts of money.
This makes the American experience interesting to study in the United Kingdom, not because the products themselves are better, but because the market clearly demonstrates the behavior of people for whom speed is more important than cost. Liquidity is needed now, not tomorrow.
Short-Term Financial Pressure in the UK and the US
Financial pressure is real on both sides of the Atlantic, but the weak points are different. In the United Kingdom, people are more likely to have no savings, which means that even a short-term loss of income or an emergency quickly leads to difficulties.
In the United States, by contrast, regular gaps between income and expenses are more common, as well as credit history issues among a significant part of the population. At the same time, due to a wider variety of loan products and easier access to them, it is easier to cover a lack of money.
Many Americans remain unprepared for emergency expenses, and the volume of credit card debt, which has reached $1.28 trillion, shows that everyday spending is increasingly financed through debt rather than savings.
US Approaches to Covering Urgent Expenses
When income is not enough to cover monthly expenses or an unexpected situation arises, such as a car breakdown or an unplanned medical bill, Americans consider several options, since there is no universal solution. When evaluating these options, they focus on which one will allow them to get money today with the least effort.
Many manage to cope with difficulties using their own funds, but a significant share also relies on external sources — help from relatives, the sale of assets, quick loans obtained through digital platforms such as ASAP Finance, installment loans, and other liquidity tools.
The first line of defense is funds in a current account, an emergency fund, or money set aside to pay bills at month-end. If this reserve is not enough or runs out quickly, credit cards become the most common tool among American borrowers for getting money here and now.
The “buy now, pay later” model is also becoming popular, especially in retail purchases. If the amount, for example, for buying a refrigerator, is too high, people choose to pay it in several installments. As a result, BNPL is no longer a niche product, since around 30% of adults use it, and among Generation Z, it is more popular than credit cards.
Today, the American credit market is heterogeneous, meaning there is no single “typical” product or uniform set of conditions for everyone. At the same time, despite the emergence of new lending options, short-term financial problems in the United States are primarily addressed through speed, accessibility, and flexibility. Only after that is the cost taken into account. But this approach also carries risks.
Cost, Speed, and Accessibility: What Makes US Solutions Attractive
The attractiveness of the American market lies not in cheapness. On the contrary, many loan products are not inexpensive. The real attractiveness is that money can be obtained quickly, in small amounts, without a large package of documents, and with the help of a mobile device, from anywhere in the country.
Three features stand out:
- Credit cards and installment payments are already integrated into the payment system.
- Fintech lenders have simplified the process of obtaining small loans and accelerated their funding.
- Households have learned to value immediate liquidity, even when the cost is high, which is one reason outstanding balances on credit cards and other personal loans in the United States remain high.
Which US Practices Translate Well to the UK Context
The UK should not fully copy the American approach. But some elements can be useful if the goal is to help people cope with difficulties more confidently, rather than push them into more debt. The point is not to borrow the way people do in the US. The point is different: households need simple and fast ways to get through a small financial setback before it turns into a serious problem.
There are several practical steps that work well:
- Have an emergency fund, even if it is small.
- Use short-term loans only when there is a clear purpose, rather than as a постоянный tool to cover budget gaps.
- Repayment schedules should be clear and visible directly in a banking app.
- Payment dates, salary income, and automatic debits should be aligned with each other.
How Do These Lessons Apply to the UK Without Copying the US Model?
America’s loan culture should not be copied. Only useful elements should be adopted — speed, transparency, and expanded digital access. At the same time, there are aspects of the US that the UK should not adopt. For example, reliance on revolving loans to cover basic expenses often increases debt and creates a tendency to borrow more.
In the UK, the approach is more balanced: the focus is on having a financial safety buffer, more thoughtful loan product design, and stronger mechanisms to prevent repeat borrowing.
The United States clearly demonstrates how people behave in an urgent liquidity need. The UK can learn from this behavior, but the system should meet the same need with fewer long-term risks.
article written by Dawnesha Burns
