According to a recent Bankrate report, 33% of Americans have more credit card debt than emergency savings. This alarming trend raises concerns about financial stability in the U.S.
Why Credit Card Debt is Rising
Greg McBride, Bankrate’s Chief Financial Analyst, states that while fewer Americans report high credit card debt compared to previous years, the percentage is still significant.
One key reason for this surge is inflation. When income remains stagnant but expenses increase, more households rely on credit cards to cover daily costs.
How Much Debt Are Americans Carrying?
Data from the Federal Reserve Bank of New York reveals that the average household credit card debt is around $21,000.
Financial Experts’ Advice on Managing Debt
Experts from Emory University and Tulane University suggest:
- Limit new expenses on your credit card whenever possible.
- Track your income and expenses carefully to create a better budget plan.
- Build an emergency fund with at least $500–$1,000 to avoid using credit for unexpected costs.
Who is Most Affected by Credit Card Debt?
According to Bankrate, the likelihood of having more credit card debt than savings is highest among:
- Millennials (42%)
- Gen X (39%)
- Gen Z (27%)
As interest rates continue to rise, managing credit card debt wisely is crucial for achieving financial security.
Conclusion
With more Americans struggling with debt, financial literacy and smart money management are more critical than ever. Consider using a debt repayment calculator to develop a strategy for getting out of debt.
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