This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Savings Rate, Credit Card Delinquencies Offer Different Outlooks

NEW YORK (TheStreet) -- Call it a tale of two debt scenarios.

One study out this week shows that only half of Americans have more emergency savings than they do credit card debt.

But another shows that Americans' credit card delinquency rates are at five-year lows.

First up is Bankrate's data on emergency savings among consumers, which stands at the lowest level since 2011.

According to Bankrate, only 51% of U.S. adults have more emergency savings than credit card debt. Another 28% have more credit card debt than emergency savings, while 17% have neither emergency savings nor credit card debt.

Americans in their major earnings years, between the ages of 30 and 64, are most likely to have more credit card debt than emergency savings. "That's a reflection of the stagnant incomes, long-term unemployment and high household expenses that are hampering the financial progress of many Americans," says Greg McBride, CFA, and Bankrate.com's chief financial analyst.

All in all, that led to a "dip" in Americans' financial security in the first month of 2014 -- not exactly a sign of momentum for the perpetually sluggish U.S. economy. "The stock market's rocky start to the year and a run of less-than-stellar economic readings have put a dent in consumers' feelings of financial security," McBride says.

A separate study from Chicago-based TransUnion shows the national credit card delinquency rate (which TransUnion defines as being 90 days or more late on credit card payments) has dropped to just 1.48% in the fourth quarter of 2013.

The rate of consumer card debt is in decline too.

TransUnion reports that the average credit card debt on an individual basis fell to $5,325 from $5,376 in the past quarter.

"Credit card delinquencies continue to remain much lower than historical norms," says Ezra Becker, a vice president of research and consulting at TransUnion. "We also believe that there is a continuing reduced demand for new credit in the prime credit ranges, [as] consumers are managing the cards they have in their wallets effectively and do not seem to be seeking additional card credit at this point."

Compared with the credit card delinquency rate quarterly average from 2007-13 and the fourth quarter of 2013, delinquency rates fell to 1.48% from 2.25%. Over the same period, credit card fell to $5,325 from $5,721.

Furthermore, every U.S. state reported a decline in credit card delinquency rates, with sharp drops in Massachusetts, Rhode Island, Wisconsin and Oregon.

What's the takeaway? It seems that even though Americans are having a tough time building an emergency savings fund, they are taking their credit card debt seriously.

Maybe once consumers pay down their card debt, those savings rates will start to climb, and give Americans some additional financial security in the process.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs