Survey: Many Americans ‘Teetering on the Edge of Financial Disaster’
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Wavebreak Media/Thinkstock(NEW YORK) — As the economy improves, more Americans are borrowing money to pay for purchases.
Thirty-seven percent have credit card debt that equals or is greater than their emergency savings, says a survey released Monday by Bankrate.com.
“These numbers mean that three out of every eight Americans are teetering on the edge of financial disaster,” says Greg McBride, Bankrate’s chief financial analyst.
According to the Federal Reserve, the average credit card debt for U.S. households is more than $15,000.
“From a purely financial standpoint, it makes more sense to pay down that high interest rate” before you begin to save, Kelley Long, a member of the American Institute of CPAs, tells Bankrate.
Borrowing money with a credit card is usually very expensive.
“If you are over your head in debt, you might want to consider a balanced transfer card, but you need to have pretty good credit to qualify for the best offers,” says credit card writer Beverly Harzog, author of The Debt Escape Plan. A balanced transfer card “would give you an opportunity to pay off your debt while paying zero interest on that.”
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