Another day, yet another sign that consumers are over-extended and are at risk of falling off a financial cliff. The number of consumers who are carrying more credit card debt than emergency savings has reached its highest point since Bankrate began tracking the metric 13 years ago. Thirty-six percent of consumers are in this situation, which is the second straight year that the data point has topped one-third of consumers.
Only 30% of consumers say they have more savings now than they did last year, while 32% of consumers said they have less.
But while the number of consumers with more credit card debt than emergency savings went up, so did the number of consumers with more emergency savings than credit card debt. That figured topped 55%, up from 51% a year ago. The 55% is the highest since 2018, when the figure was 58%, an all-time record.
Generationally, members of Generation X (ages 44-59) and Millennials (ages 28-43) are more likely to have more credit card debt than emergency savings, at 47% and 46% respectively. Only 32% of Generation Z (ages 18-27) and 24% of Baby Boomers (ages 60-78) are in that situation.
“At a time of record high credit card rates, we see a record high number of Americans carrying credit card debt that exceeds their emergency savings”said Bankrate Chief Financial Analyst Greg McBride.“Financing purchases at 20% interest rates is a sign of the financial strain millions of households are feeling.”
Americans under the age of 30 are more than twice as likely (18%) to have neither credit card debt nor emergency savings compared with those over 30 (7%).
