Almost half the nation has more credit card debt than savings

Piggy Bank

A recent Bankrate survey found almost half of respondents had as much or more credit card debt than savings. Image from Wikimedia Commons.

Debt is for the most part bad, as it is a liability, and cash is good, because it is cash and thus an asset. However, a recent Bankrate survey found almost half the nation has more credit card debt than emergency savings, a worrisome sign.

Survey says slim majority has more cash than credit card debt

Following good habits is really up to the individual as to whether or not they are going to do the right things, like foregoing desires of right now for what’s good in the long run. One can preach all they want, even if the preacher practices it themselves.

Then again, it’s been observed time and again that even the most pious don’t practice what they preach. In fact, many seem to just do the opposite anyway. Jimmy Swaggart might be mentioned, Ted Haggard and so on and so forth.

Everyone knows credit card debt is bad and savings are good. However, according to NBC News, a recent Bankrate survey found 55 percent of respondents had more in savings than credit card debt, leaving 45 percent with as much or more credit debt than savings.

1 in 4 have more debt than savings

In the survey, 26 percent had more credit card debt than savings and 16 percent had none of either. The remainder, 5 percent, had no idea or didn’t answer.

Credit card debt, according to Bankrate, more commonly eclipsed savings among parents, as 29 percent of respondents with children under age 18 had more debt than savings compared to 21 percent of people with older or no children. Those with higher incomes had more in savings, as 67 percent of people making $75,000 or more had more savings than debt, compared to 41 percent of those making $30,000 or less. Between the genders, 60 percent of men and 49 percent of women had more credit card debt than savings.

However, most respondents weren’t any less or more comfortable with their debt levels compared to 2012, as 54 percent reported feeling “the same” about their debt. Of the remainder, 2 percent had no opinion or didn’t answer, 24 percent were less comfortable with their debt level and 20 percent were more comfortable.

Some improvements

According to ABC, the 55 percent who had more in savings was an improvement; 54 percent reported more savings than debt in 2012 and 52 percent did so in 2011.

At the same time, more people are saving money these days than a decade ago, as the personal savings rate of 3.9 percent in 2012, according to Fox Business, is much higher than the 2001 rate of 0.9 percent, but lower than the 2008 rate of 5.4 percent. The federal metric for savings seems a little arbitrary, as it has to do with the Bureau of Economic Analysis calculating the total amount of disposable income, less taxes and spending, cross checked against deposit accounts held nationwide, according to CNN. Savings rate between 5 percent and 7 percent were common during the 1970s and 1980s, but declined after that.

It’s a struggle to put money away and with all the expenses and debt involved in getting by, raising children and keeping up with the Jones’, it’s a small wonder everyone isn’t running out for short term loans. Cutting anything one can and putting the difference by can make a great deal of difference.

Sources

NBC News

Bankrate

ABC

Fox Business: http://www.foxbusiness.com/personal-finance/2013/02/25/credit-card-debt-hits-all-incomes-big-and-small/

CNN: http://money.cnn.com/2010/06/30/news/economy/personal_savings_decline.fortune/index.htm

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