A new survey finds that as savings rates are dropping, credit card debt is rising.
03/09/2023 12:30 P.M.
1.5 minute read
Economic pressures, including inflation and unemployment, are having a negative impact on how U.S. consumers save for emergencies, according to a new Bankrate survey. Nearly half of the individuals surveyed in January are saving less than they were last year at this time (39%) or not saving at all (10%).
An “ugly stew is brewing” as consumers grapple with higher prices, especially if they don’t have savings, Bruce McClary, senior vice president of the National Foundation for Credit Counseling, told CNBC.
More details from the Bankrate survey:
- “Growing debt hurting savings. 36% have more credit card debt than emergency savings, the highest on record since 2011. 51% have more emergency savings than credit card debt.
- Working generation is worst off. More than 4 in 10 of those in their prime working years (age 27-58) say they now have more credit card debt than short-term savings.
- Emergency savings need a boost. Only 43% of U.S. adults would pay for an unexpected emergency expense from their savings, with lower-income households, women and younger generations being less likely than their counterparts.
- Credit card dependency at a record high. 25% of people would accrue credit card debt to pay for a $1,000 emergency expense and pay it off over time—a record percentage since polling started in 2014.
- Inflation, unemployment are to blame. 74% say economic factors are causing them to save less right now, including 68% who say inflation is to blame (up from 49% last year) and 44% who say changes in income and employment are holding them back.
- Consumer concern is high. 68% of people are worried they wouldn’t be able to cover their living expenses for just one month if they lost their primary source of income, including 85% of Gen Zers—the most concerned of any generation.”
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