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Too many Americans have more credit card debt than savings

by | Feb 28, 2013 | Credit Card Debt, Firm News

One of the most important things that people in Memphis and elsewhere can do to avoid having to file for bankruptcy is to save a decent amount of money to get you through an emergency. Of course with the economy the way it is, it would have been impossible for many people to save for prolonged unemployment or losing a house, but keeping a savings account can help to weather some financial storms.

That’s why the results of one recent survey are so distressing. According to the survey from website, 45 percent of Americans have more credit card debt than they do savings. While it was an improvement from the 54 percent of Americans who said in 2012 that they had more in savings than in credit card debt, the improvement is miniscule.

A senior financial analyst with the website said that although the recession convinced many people to pay off their debts and start setting aside more funds for a rainy day, many people are unable to set aside the money they need to. He said the fact that wages are not growing is one of the main factors.

It’s recommended for the average American that you have three months worth of your salary as savings. That way the loss of a job could help you weather the storm for a short period of time. But too many Americans are not taking that advice. According to the survey, only 41 percent of people making less than $30,000 a year have more savings than credit card debt.

And it’s those people with little assets that may have to seek bankruptcy protection should the need arise. The results of this survey should be a wakeup call to policymakers that more needs to be done to encourage savings and to get wages to grow.

Source: ABC News, “Nearly Half of Americans Have More Credit Card Debt Than Savings,” Susanna Kim, Feb. 25, 2013