While Americans mostly believe that the economy has picked back up to pre-Great Recession levels, and most are feeling less pessimistic about job security, savings and debt, more than one third still teeter on the edge of financial disaster, according to a new survey released Monday by Bankrate.com.
Some 37 percent of Americans have credit card debt equal to or greater than their emergency savings. This means that a high medical bill, car accident or other costly expense could easily push them into a financial crisis.
"A pretty good chunk of the population still has more credit card debt than they have in their emergency savings account," said Jeanine Skowronski, a senior credit card analyst and reporter at Bankrate.com, according to U.S. News & World Report. "The recession's over, but there's still some lagging effects that can be affecting some people's pockets."
Thankfully, more Americans - 58 percent - said they had more savings than debt, but Skowronski said it's only a marginal improvement from previous years.
The study found that millennials (ages 18 to 29) and those of retirement age (65 and older) were the most likely to have an emergency fund or savings.
"We're seeing pretty much the same numbers every year, which shows that people really aren't prioritizing savings still," Skowronski said. "The problem with credit card debt is it's a vicious cycle. If you're carrying credit card debt, you're going to be carrying more in interest on that, and that's part of the reason why I still think we're seeing the number stay there."
Those in the 30-49 age range, who are often paying mortgages and child care expenses, are in the worst shape when it comes to debt and savings, with 46 percent telling Bankrate they have credit card debt greater than or equal to what they have saved.
"They probably have more debts that they have to deal with month to month that they have to pay off. That's sort of the demographic that was the hardest hit in the recession, and they're the ones struggling the most to rebound still," Skowronski said. "I just think that generally Americans are really good at spending. They're not good at saving. It's just not in the front of their minds as they go about their day-to-day business."
The findings are somewhat unsettling when put into context. A 2014 survey by American Express found that 50 percent of all Americans had experienced unforeseen expenses sometime in the past year, according to Market Watch. Forty-four percent of those Americans with unforeseen expenses had one for health care related issues, and 46 percent had one for car trouble - two expenses that usually require prompt payment.
Skowronski suggested that Americans should save early and pay debts off quickly to avoid a compounding interest cycle.
Total outstanding revolving credit, according to the Federal Reserve, was somewhere around $888 billion at the end of the fourth quarter last year, up from $857.6 billion the previous year, reported Market Watch.
"Go back to basics. Write your budget out," Skowronski said. "Find what things that you can cut so you have five, 10, 20 extra dollars each week that you can drop into a savings account that will add up over time," she says, also noting that tax refunds can go a long way toward repaying debt or cushioning savings. "If you get your refund, you can do one of two things: If you're in that situation where you have more credit card debt, you can use the refund to pay it off so it's not growing thanks to the interest. If you don't, but you don't have any savings on hand, don't spend that on a vacation instead."
