Slight Majority of Americans Have More Emergency Savings Than Credit Card Debt
A recent Bankrate survey found that just 53 percent of Americans have more emergency savings than credit card debt, a number which is slightly down from 54 percent last year but still a significant improvement from 44 percent in 2019 and 49 percent in 2020. The survey also found that 22 percent of households have more credit card debt than emergency savings, down from 27 percent in 2021 and the lowest it’s been since 2018.
According to the survey, 15 percent of Americans do not have any credit card debt, but they also have no emergency savings. This “is still a precarious position as, without emergency savings, you could be one unplanned expense away from having high-cost credit card debt,” said Greg McBride, Chief Financial Analyst at Bankrate.
Half of Americans said they prioritized boosting emergency savings, 32 percent prioritized paying down debt, 4 percent focused on both, and 12 percent said neither was a priority. 27 percent have more emergency savings now than prior to the coronavirus pandemic, which is up from 17 percent in July 2021 and 13 percent in August 2020.
Millennials were the most likely age group to say their credit card debt exceeds emergency savings at 32 percent, compared to 24 percent of Gen X and 23 percent of Gen Z. However, older millennials (age 33 to 41) were the only age group prioritizing repaying debt over boosting emergency savings.
“Younger workers were hardest hit by unemployment and income disruptions in the early stages of the pandemic, and it has taken a toll on their emergency savings,” said McBride. “Nearly half, 49 percent, of adults age 18-32 report a decline in emergency savings since the start of the pandemic and just 26 percent now have more savings.”
Bankrate also found that upper middle-income households—those with annual incomes of $50,000 to $74,999—are most likely to have more credit card debt than emergency savings at 38 percent, followed by households with annual incomes under $30,000 at 31 percent.