According to a new survey by Bankrate.com, the number of American consumers who can afford to pay off their credit cards continues to drop. The survey found that only 51% have enough cash in their accounts to clear themselves of credit card debt. That is the lowest percentage since the firm started tracking the number in 2011.
Nearly 30% of Americans reported having more credit card debt than emergency savings — the highest percentage in the past four years. In addition, the U.S. personal savings rates continue to fall. According to the U.S. Department of Commerce, the U.S. personal savings rate fell to 4.2 percent in November of last year. This is near the 2007 low mark of just under 3 percent. Furthermore, according to a study from Corporation for Enterprise Development, 44% of American households have less than three months’ worth of savings.
Kristin Reynolds, an economist at IHS Global Insight, noted that “revolving credit…expanded at the fastest year-on-year pace since before the financial crisis of 2008. Evidently, consumers increased their borrowing to finance some of their holiday spending.”
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