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More Americans relying on credit card debt instead of savings to cover expenses

Posted at 3:56 PM, Feb 24, 2023

With inflation at its highest levels in four decades, it comes as no surprise that Americans are tapped out of their savings and relying on credit cards.

According to a Bankrate survey,36 percent of Americans started the year with more credit card debt than savings. Bankrate said 36 percent set a record since it began conducting the survey in 2011.

Baby boomers were most likely to have savings that exceeded credit card debt, while millennials were most likely to have credit card debt that exceeds savings.

In January 2022, 22 percent of those surveyed had more credit card debt than savings, which was down from 28 percent in January 2020.

A slim majority of Americans, 51 percent, said they had more savings than credit card debt. The survey found that 13 percent had no credit card debt or savings.

“It is quite stunning that such a high percentage of adults has no savings and no credit card debt,” Bankrate senior economic analyst Mark Hamrick said in a press release. “Anyone with no such savings, including those without access to credit, risks tremendous stress, or worse, on their personal finances when hit with a significant unplanned expense such as a major home or auto repair.”

Although 39 percent of Americans said they have less in emergency savings than a year ago, 26 percent reported having more.