Do Americans’ Have More Credit Card Debt or Savings? Survey Says…

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March 13, 2014 by Lisa Brammer

Even though the skies over America’s economy have a few rays of sunshine poking through the clouds, American’s are not ready to put away their umbrellas—they want more money in their rainy-day savings accounts.

According to a survey conducted in February by Bankrate.com, a leading publisher, aggregator, and distributor of personal finance content on the internet, Americans’ comfort levels with their savings dropped to their lowest point in a year. Currently, those who are not happy with their savings outnumber those who are by more than two-to-one.

Bankrate conducts a monthly survey that measures how secure Americans feel about their personal finances compared with 12 months ago. Bankrate’s Financial Security Index fell to 99.3 in February, its lowest level since November of last year. Readings of less than 100 indicate declining levels of financial security, accordingly, readings above 100 indicate higher levels compared to 12 months ago.

There are five components to Bankrate’s Financial Security Index that include: job security, net worth, debt, savings, and overall financial situation. Two of the components, job security and net worth scored higher than a year ago. Debt and overall financial situation lost a little ground and fell to neutral, while savings, which is consistently the least favorable component of financial security dropped, as mentioned before, to its lowest point in a year.

When asked “Which is greater; the amount of your credit card debt or the size of your emergency fund or savings account?” 51 percent, responded with savings, 28 percent with credit card debt, and 17 percent reported having none of each. The rest either didn’t know or refused to answer.

Even though the survey estimates that over half of Americans have a larger rainy-day fund than credit card debt, the number of savers appears to be dropping and the number who say their credit card debt dwarfs their savings seems to continue to grow as it has each year since this survey began 4 years ago.

According to Greg McBride, Bankrate’s chief financial analyst, Americans in their prime earning years (between ages 30 and 64) are the ones most likely to have more credit card debt than rainy-day savings. “This is a reflection of the stagnant incomes, long-term unemployment and high household expenses that are hampering the financial progress of many Americans,” McBride said.

Back in January I posted a blog called “Freedom from Debt, the New American Dream.” (https://ucscollections.wordpress.com/2014/01/09/freedom-from-debt-the-new-american-dream/ ) It’s about a survey conducted by LoanDepot.com,LLC, the third largest private, independent retail mortgage lender in the United States. The results showed that 34 percent of respondents considered being debt free to be the new American Dream. Keeping that in mind, you can see that even though there is a growing group of Americans who report their credit card debt is larger than their savings, it appears as if over half have more rainy-day savings than credit card debt and could, in fact, pay off their debt if need be.

Founded in 1950, United Credit Service, Inc. is a full service revenue cycle management and debt collection agency in Wisconsin providing highly effective, customized one on one management and recovery solutions for our business partners. We offer pre-service collection solutions as well as traditional back-end collections. Visit our website at http://www.unitedcreditservice.com or call 877-723-2902.

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