Credit: Unsplash
Are Americans in Trouble?
Bankrate, a leading financial services company, published findings today from their most recent survey that reveal a concerning financial trend in America: once again, credit card debt outpaces personal savings. In the latest Bankrate survey, a staggering one in three Americans admitted to carrying more credit card debt than they have in emergency savings, a reality consistent with findings from the previous year.
Generation X Bears the Brunt of Credit Card Debt Burden
While each generation has seen an uptick in debt from 2021 to 2022, Generation X holds the most considerable credit card balances, averaging $8,134 per individual, according to Bankrate’s data. Baby boomers follow with an average credit card debt of $6,245. Millennials and Generation Z carry slightly less debt, with average balances of $5,649 and $2,854, respectively. The Silent Generation, born between 1928-1946, holds the lowest average credit card debt at $3,316.
Americans Face Uphill Battle Paying Off Credit Card Debt
The grim reality of credit card debt is not lost on Americans, as evidenced by the findings of the Bankrate survey. A mere 50% of respondents feel confident in their ability to pay off their credit card balance, adding to the pressure felt by many households across the nation. In the fourth quarter of 2023, credit card balances surged by $50 billion, equating to a 4.6% increase, and delinquencies in card payments are on the rise, indicating increased financial stress for younger and lower-income households.
Tips for Reducing Credit Card Debt
In light of these challenges, financial experts suggest strategies to alleviate the burden of credit card debt. “Only half of Americans believe they can pay off their bill,” says Greg McBride, Bankrate’s Chief Financial Analyst. “Recognizing that the cost of carrying debt has increased significantly in the past two years and the insufficient level of emergency savings, more Americans are focusing on both paying down debt and boosting emergency savings simultaneously, rather than one to the exclusion of the other.”
In these uncertain economic times, Bankrate advises individuals to take proactive steps to manage their credit card debt and increase their emergency savings.
