30% of Americans Have More Credit Card Debt Than Savings
A new survey indicates that nearly 30% of Americans have more credit card debt than savings. Only 51% of those surveyed said they had enough money in their emergency funds to pay off all of their current credit card debt.
The survey found that those who are most in need of rainy day funds were the least likely to have them. These consumers are unable to make the money to pay off their current debts, let alone save money for the future.
“This is a reflection of the stagnant incomes, long-term unemployment and high household expenses that are hampering the financial progress of many Americans,” said Bankrate’s Chief Financial Analyst Greg McBride.
Consumers are becoming more confident about the economy, increasing their debt levels because they feel they can make the money to repay those debts.
“We’ve already forgotten 2008 and 2009, and now we’re projecting into the indefinite future and we’re spending based on as if it had already happened,” said Carl Richards, a financial planner at BAM Advisor Services, in an interview with Time. “Our default setting is optimistic, and maybe overly optimistic.”
Consumers should pay off their debts, put aside money for savings and only charge what they know you can pay back at the payment due date. They need to understand their financial limits.