Today’s sign that an economic apocalypse is on the way: Only 44% of Americans have more savings than credit card debt, according to a survey conducted by Bankrate.com, which represents the lowest figure in the nine years that the site has been tracking the data point.
Nearly 30% of Americans have more credit card debt than savings, up from 21% a year ago. Last year, 58% of Americans had more savings than credit card debt, before dropping to 44% this year.
“The sharp deterioration in the relationship between credit card debt and emergency savings – with an increasing number of households having more credit card debt than emergency savings and a decline in those with more emergency savings than credit card debt – is an ominous indicator of the financial health among American households,” said Greg McBride, the chief financial analyst at Bankrate, in a statement.
Slightly more people are prioritizing paying down debt this year, according to Bankrate. However, significantly fewer people are planning on increasing their emergency savings this year, compared with 2018.
Generationally, older individuals are more likely to have more savings than credit card debt, according to Bankrate’s survey, while Millennials are more likely to have a credit card balance that exceeds the amount in their savings account. Millennials are also the only generation that is prioritizing paying down debt over boosting their emergency savings, perhaps because they have more credit card debt than other generations, Bankrate concluded.
One other potential red flag that Bankrate noted: the number of people with no credit card debt and no savings jumped to 18% of survey respondents this year, from 12% a year ago. Not having any savings is a problem in the event of an emergency, Bankrate said.