The share of Americans who have higher emergency savings than credit card debt has increased according to Bankrate.com
The share of Americans who have higher emergency savings than credit card debt has increased according to Bankrate.com.
Its Financial Security Index shows that 58% of respondents said the balance of their emergency fund exceeds credit card debt, up from 52% in 2016 and 2017, and the same as 2015 which was the highest for 8 years.
However, 21% said that their credit card debt is greater than their emergency savings; 12% have neither credit card debt or savings.
While the report may mean that some households would struggle if faced with an emergency, the overall takeaway is that more people are boosting their savings and paying down debt.
“As unemployment declines and household income rises, more households are making progress on boosting savings, paying down debt or both,” said Bankrate.com chief financial analyst, Greg McBride, CFA. However, McBride warns, “Having no credit card debt and no emergency savings is a sign of trouble, not a badge of honor. A lack of emergency savings is indicative of living on the financial edge.”
More than half of respondents (53%) are prioritizing increasing their emergency funds, 40% are more focused on paying down debt. A small share (3%) said they are prioritizing both, with the same percentage focusing on neither.
Millennials are most likely to have larger emergency funds than credit card debt and are more likely to be focused on paying down debt.
