Americans Saving More But Still Carrying Costly Credit Card Debt
Americans are saving more from their paycheck, but a greater number of people are carrying costly credit card balances, according to a 2016 Financial Literacy Survey.
The survey, which was conducted by Harris Poll online between March and April 2016, found 26% of Americans are saving every year, an increase from 24% the previous year. 69% of those individuals are contributing to a non-retirement savings account.
While this is good news, many Americans are still at-risk financially due to credit card balances. 14% of the adults in the United States carry a balance of at least $2,500 in credit card debt each month, up from 11% last year. Since the average interest rate on a credit card is 14.76%, this is a costly practice.
“Personal savings is the foundation for a stable financial future,” said Susan C. Keating, president and CEO of the National Foundation for Credit Counseling. “That foundation weakens as debt becomes unmanageable and balances are carried for extended periods of time. Those who are unable to make sufficient progress reducing their debt balances should seek the financial advice and tools they need to stabilize their finances and put a financial action plan in place to achieve future goals. Our national network of trusted nonprofit agencies stands ready to serve those who would benefit from professional guidance.”
Other key findings include:
- 26% of adults still do not save any portion of their yearly income for retirement, which represents a slight decrease from last year (29%). Respondents who reported having financial concerns said retiring without enough money was the major reason for their worry.
- Over half of American adults (56%) would give themselves a grade of an A or a B regarding their knowledge of personal finance, but 75% believe they could benefit from professional advice. To obtain this education, 23% said they would turn to a professional non-profit credit counseling agency.