The nation’s mounting credit card debt threatens to swamp its savings.
More than one-third of American adults — 36% — have more credit card debt than emergency savings, according to an annual survey by Bankrate, the personal finance site. In more than a decade of polling, the figure has never been higher.
That is one of several recent reports that show consumers falling behind on their credit cards.
Roughly half of all credit-card holders now carry balances from month to month, Bankrate found in another survey, up from 39% in 2021.
The average borrower holds $6,360 in card debt, TransUnion reports, an all-time high.
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“It’s worrisome, because credit-card rates are at record highs,” said Ted Rossman, senior industry analyst at Bankrate. “Unfortunately, we’re moving in the wrong direction on a lot of this.”
Credit card balances and interest rates are rising apace
Card balances are rising apace with interest rates: The higher the rate, the more you must pay to bring the balance down.
The average credit card now charges 21.5% interest, according to a WalletHub index. That’s the highest rate on record.
On top of that, Bankrate found, 43% of cardholders with debt don’t know how much interest they’re paying.
Credit-card debt is rising at a time when America is struggling to save.
The personal savings rate stood at 3.8% in January, according to federal data, meaning that consumers set aside only a smidgen of their income as savings.
