Years of skyrocketing inflation may have significantly impacted people’s ability to pay for their living expenses and save, as a record-high percentage of Americans now say they have more in credit card debt than in emergency savings.
More than one-third (36 percent) of U.S. adults have more credit card debt than emergency savings, according to a new Bankrate survey. It’s the highest percentage (tied with last year) since 2011, when Bankrate began asking about credit card debt and emergency savings.
This data comes from Bankrate’s yearly emergency savings report, an exclusive survey done by Bankrate and polling partner SSRS. Since 2014, the survey has annually polled 1,000+ U.S. adults about their level of debt and emergency savings. The most recent data, polled in January 2024, also examines whether people are prioritizing paying off debt or building emergency savings, as well as if they have more emergency savings now compared to last year.
Despite reporting more debt, many Americans are also working to improve their emergency savings. Nearly one in three (30 percent) U.S. adults have more emergency savings than they did a year ago, the highest percentage since 2020. Only 32 percent have less emergency savings than last year, the lowest percentage since 2020.
At a time of record high credit card rates, we see a record high number of Americans carrying credit card debt that exceeds their emergency savings.
— Greg McBride, CFA | Bankrate Chief Financial Analyst
Key Bankrate statistics on emergency funds and personal savings
- The number of people with savings is increasing. 55% of U.S. adults have more emergency savings than credit card debt, the highest percentage since 2018.
- People are working hard on their finances. 36% of U.S. adults are prioritizing both debt repayment and building emergency savings, as opposed to just focusing on one. That’s the highest percentage since 2018.
- Many would borrow in an emergency. Only 44% of U.S. adults would pay an emergency expense of $1,000 or more from their savings, as of December 2023 polling. 35% would borrow money, including 21% who would finance with a credit card and pay it off over time, 10% who would borrow from family or friends and 4% who would take out a personal loan.
- Inflation is a common culprit that’s affecting savings. 63% of U.S. adults say inflation is causing them to save less for unexpected expenses, while 45% say the same of rising interest rates, as of December 2023 polling. However, 19% of people say rising interest rates are causing them to save more for unexpected expenses.
- Low savings could be concerning. If they were to lose their primary source of household income tomorrow, 66% of U.S. adults would be worried that they wouldn’t have enough emergency savings to cover a month’s living expenses, as of December 2023 polling.
More than 1 in 3 Americans have more credit card debt than emergency savings
More than one in three (36 percent) U.S. adults had more credit card debt than money saved in an emergency savings account in both 2023 and 2024. But, the majority (55 percent) of U.S. adults have more emergency savings than credit card debt. That’s up from 51 percent in 2023 and is the highest percentage since 2018.
Additionally, 10 percent of Americans have no credit card debt or emergency savings at all, the lowest percentage in the poll’s 14-year history:
Note: Not all percentages total 100 due to rounding.
Source: Bankrate survey, January 19-21, 2024
Millennials and Gen Xers are more likely than other generations to have more credit card debt than emergency savings:
- Gen Zers (ages 18-27): 32 percent
- Millennials (ages 28-43): 46 percent
- Gen Xers (ages 44-59): 47 percent
- Baby boomers (ages 60-78): 24 percent
Additionally, baby boomers are the most likely generation to have more emergency savings than credit card debt:
- Gen Zers: 49 percent
- Millennials: 46 percent
- Gen Xers: 47 percent
- Baby boomers: 68 percent
Average credit card rates, as of February 2024, are at a record high. If you’re carrying a credit card balance this year, you may end up paying a great deal of money in interest.
“Financing purchases at 20 percent interest rates is a sign of the financial strain millions of households are feeling,” Bankrate Chief Financial Analyst Greg McBride says.
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Women are more likely than men to have more credit card debt than emergency savings, or to have neither:
We asked: Thinking about the amount of credit card debt you now have and the money you have in your emergency fund or savings account, which is higher?
Gender Credit card debt Emergency savings No credit card debt and no emergency savings Source: Bankrate Women 40% 48% 12% Men 31% 62% 8% Additionally, the likelihood of having more emergency savings than credit card debt rises with income:
We asked: Thinking about the amount of credit card debt you now have and the money you have in your emergency fund or savings account, which is higher?
Year income Credit card debt Emergency savings No credit card debt and no emergency savings Source: Bankrate Less than $50,000 42% 40% 18% $50,000-$74,999 39% 57% 4% $75,000-$99,999 38% 59% 4% $100,000 or more 21% 78% 1%
Americans want to improve both their debt and savings
Regardless of their financial situation, more people this year want to tackle both debt and savings, compared to last year: 36 percent of U.S. adults are prioritizing both paying down debt and increasing emergency savings right now. It’s the highest percentage in seven years, and up slightly from 2023, when 34 percent of people said the same.
When picking between the two, more people are prioritizing emergency savings. Around one in four (28 percent) people are prioritizing boosting emergency savings, but that’s the lowest percentage yet in Bankrate’s polling. Another 25 percent are paying down debt, up from 23 percent in 2023:
Note: Not all percentages total 100 due to rounding.
Source: Bankrate survey, January 19-21, 2024
“Recognizing that the cost of carrying debt has increased significantly in the past two years and the insufficient level of emergency savings, more Americans are focusing on both paying down debt and boosting emergency savings simultaneously, rather than one to the exclusion of the other.” McBride says. “Having a direct deposit from your paycheck into a dedicated savings account automates the savings, allowing you to channel your take home pay toward the goal of paying down debt.”
All generations were more likely to prioritize both on paying down debt and increasing emergency savings, rather than only focusing on one. Notably, 43 percent of millennials are prioritizing paying both at the same time, while 22 percent are only paying down debt and 29 percent are only increasing emergency savings.
Nearly 1 in 3 people have more emergency savings than they had a year ago
Though many Americans report having higher credit card debt than emergency savings, people are saving more this year overall. Almost a third (30 percent) of U.S. adults have more emergency savings now than they had a year ago, the highest percentage in Bankrate’s polling since 2020.
Another 32 percent of people have less emergency savings than they did last year — down from 39 percent in 2023, and the lowest percentage in five years.
Another 29 percent have the same amount of emergency savings as last year and 9 percent had no emergency savings last year or this year:
Note: Not all percentages total 100 due to rounding.
Source: Bankrate survey, January 19-21, 2024
Among generations, baby boomers were the most likely to say their savings were about the same year-over-year (37 percent). Gen Xers were the most likely to say they had less than they had a year ago (34 percent).
As of December 2023, more than half of Americans wouldn’t pay for a sudden $1,000 bill from their emergency savings
The majority (56 percent) of U.S. adults wouldn’t pay for an emergency expense of $1,000 or more, such as an emergency room visit or unexpected car repair, from their savings account. The percentage of people who would pay from their savings has barely changed over the past three years:
- 2024: 44 percent
- 2023: 43 percent
- 2022: 44 percent
“All too many Americans continue to walk on thin ice, financially speaking, with fewer than half indicating they would pay an emergency expense of $1,000 or more from savings,” Bankrate Senior Economic Analyst Mark Hamrick says. “Inflation has been a key culprit standing in the way of further progress on the savings front. Fortunately, rising interest rates have also provided more generous returns on savings.”
If they don’t pull the funds from savings, the second-most common option (21 percent) would be to finance the expense from a credit card and pay it off over time. Others would reduce their spending on other things or take out a loan:
Source: Bankrate survey, December 15-17, 2023
“Interest rates charged on credit card debt, recently averaging nearly 21 percent, are the highest we’ve seen. Yet 21 percent of Americans would use a credit card and pay it off over time when facing a sudden, unforeseen expense,” Hamrick says. “That risks putting them even farther behind on their financial goals.”
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Men, older Americans and higher-income or highly-educated households are all more likely to say they would pull from savings for an emergency $1,000 expense. Men are only slightly more likely than women to say they would use their savings:
- Men: 47 percent
- Women: 43 percent
Baby boomers are far more likely to say they would use their savings for an emergency expense, compared to younger generations:
- Gen Zers: 31 percent
- Millennials: 43 percent
- Gen Xers: 36 percent
- Baby boomers: 59 percent
People with a college degree (or more) are more than twice as likely to say they would pay the costs from their savings than those with at most a high school diploma:
- High school diploma or less: 29 percent
- Some college education: 40 percent
- College degree or more: 64 percent
Far more households with a yearly income of $100,000 or more say they would pay for a $1,000 emergency bill with savings:
- Less than $50,000 per year: 26 percent
- $50,000-$74,999 per year: 41 percent
- $75,000-$99,999 per year: 58 percent
- $100,000 per year or more: 70 percent
Nearly 2 in 3 Americans say rising prices are causing them to save less as inflation’s impact lingers
The majority (63 percent) of Americans say high inflation is causing them to save less. They also commonly cited rising interest rates and changes in income or employment:
- High inflation: 63 percent
- Rising interest rates: 45 percent
- Change in income or employment status: 41 percent
- Anything else: 42 percent
Rising interest rates can make your monthly debt payments more expensive, but high interest rates aren’t always harmful — someone taking advantage of a savings account with interest could benefit from higher rates. Accordingly, 19 percent of people say rising interest rates are causing them save more for unexpected expenses:
Source: Bankrate survey, December 15-17, 2023
Though inflation has a major impact on saving habits, inflation is now far lower than it was in 2023. The percentage of people who say inflation caused them to save less is lower, too, from 68 percent in 2023 to 63 percent in 2024.
“Inflation’s once-in-a-generation surge has left its mark on American savings habits,” Hamrick says. “There is a glimmer of hope, however, with word that 19 percent of Americans cite rising interest rates as the reason they’ve saved more.”
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Women are significantly more likely to say inflation is causing them to save less than men:
- Men: 58 percent
- Women: 67 percent
Gen Xers were unlikely (at 36 percent) to say they would pay for a $1,000 emergency expense with savings. They’re also the generation most likely to say inflation is why they’re saving less:
- Gen Zers: 57 percent
- Millennials: 66 percent
- Gen Xers: 69 percent
- Baby boomers: 58 percent
Households with an income of $100,000 per year or more were the least likely to say inflation is why they’re saving less:
- Less than $50,000 per year: 67 percent
- $50,000-$74,999 per year: 63 percent
- $75,000-$99,999 per year: 65 percent
- $100,000 per year or more: 55 percent
If they were to lose their job tomorrow, 2 in 3 Americans would be worried about having enough savings to cover a month’s living expenses
Not having enough savings for an emergency is weighing on people’s minds. If they were to lose their primary source of income tomorrow (such as their job), 66 percent of U.S. adults would be worried about having enough emergency savings to cover their immediate living expenses for the next month. That includes 42 percent of people who would be very worried:
Note: Not all percentages total 100 due to rounding.
Source: Bankrate survey, December 15-17, 2023
Only 34 percent of people would be either not too worried or not at all worried about covering their living expenses if they were to lose their immediate source of income.
Despite Americans’ concerns about the future, the U.S. defied expectations and did not experience a recession in 2023. A recession in 2024 is still possible, but now, high interest rates could be a good opportunity to increase your savings.
“It is true that we dodged the proverbial bullet as an often-predicted recession did not yet materialize during the last couple of years,” Hamrick says. “The still-robust job market continues to provide the foundation for the opportunity to save, bolstered by some of the best returns on savings in years. Now is the time to prepare for the unexpected by prioritizing emergency savings.”
As of May 2023, more than 1 in 5 Americans have no emergency savings
Nearly one in three (30 percent) people in 2023 had some emergency savings, but not enough to cover three months of expenses. This is up from 27 percent of people in 2022.
Note: Not all percentages total 100 due to rounding.
Source: Bankrate survey, May 19-22, 2023
Also, nearly one in four (22 percent) U.S. adults said they have no emergency savings. Despite economic challenges, the percentage remains relatively unchanged year-over-year. In 2022, 23 percent of Americans had no emergency savings.
Because building savings takes time, McBride recommends people automate contributing to their savings accounts as much as possible. “Successful saving is all about the habit. Regular contributions such as a direct deposit from your paycheck or an automatic monthly transfer into an online savings account lead to a higher level of emergency savings and greater comfort level with it,” McBride says.
Younger Americans, who are less likely to have built that habit, are more likely to have little to no emergency savings. Nearly one-third (31 percent) of Gen Zers do not have emergency savings — more than twice as many as the 15 percent of baby boomers who have no emergency savings. Baby boomers are also more than three times as likely to have enough savings to cover six months or more of expenses as Gen Zers (47 percent and 13 percent, respectively).
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How much emergency savings someone has rises as they grow older and wealthier. The difference in emergency savings levels is particularly stark between different income brackets. Households with a yearly income under $50,000 a year are more than seven times more likely to have no emergency savings than households who make $100,000 a year or more:
Income bracket Percentage without emergency savings Percentage with enough savings for three months of expenses or more Percentage with enough savings for six months of expenses or more Source: Bankrate survey, May 19-22, 2023 Under $50,000 a year 37% 28% 16% $50,000-$74,999 18% 49% 29% $75,000-$99,999 10% 61% 41% $100,000 or more 5% 75% 50%
More than half of Americans are uncomfortable with their level of emergency savings
More than half of U.S. adults (57 percent) feel uncomfortable about their current level of emergency savings, as of May 2023. That includes 33 percent who are “very uncomfortable” with their level of savings and 24 percent who were “somewhat uncomfortable.” Only 43 percent of Americans are comfortable with their current level of savings: 15 percent are “very comfortable” and 28 percent are “somewhat comfortable.”
Source: Bankrate survey, May 19-22, 2023
More than half (56 percent) of baby boomers are comfortable with their level of emergency savings, an 18 percent leap above Gen X, the generation with the second-highest comfort level. In comparison, 32 percent of Gen Zers and 37 percent of millennials are comfortable with their level of emergency savings.
Higher-income households are also more likely to feel more comfortable with their level of emergency savings. About two-thirds (67 percent) of households with an income under $75,000 a year are uncomfortable with their current level of emergency savings, compared to 41 percent of those who earn $75,000 or more a year.
“It takes time to accumulate a sufficient emergency savings cushion, in large part because household expenses tend to increase until your peak earning years, making what constitutes an adequate cushion a moving target,” McBride says.
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As of May 2023, two-thirds (64 percent) of U.S. adults say they would feel comfortable about their savings when they have enough to cover six months of expenses:
We asked: What’s the minimum amount of emergency savings you would need to feel comfortable?
No emergency savings 3% Source: Bankrate survey, May 19-22, 2023 Some, but less than would cover 3 months’ expenses 9% 3 to 5 months’ expenses 25% Enough to cover 6 months’ expenses or more 64% In comparison, 25 percent would feel comfortable if they had enough savings to cover three to five months of expenses. Only 9 percent would be comfortable with having some but less than three months’ of expenses.
In a priority shift, 88 percent of people in 2023 say they wouldn’t be comfortable with their emergency savings until they have enough to cover at least three months of expenses, up from 72 percent in 2019.
Over half of employed Americans add to their emergency savings at least monthly
Like any habit, building a savings account takes time and consistency. As of May 2023, more than half of (56 percent) employed Americans contribute to their emergency savings accounts at least monthly: 29 percent contribute every paycheck, and 26 percent contribute once a month.
Source: Bankrate survey, May 19-22, 2023
Note: Employed Americans only
As for those who contribute to their savings account less frequently, 18 percent of workers contribute every couple of months, 8 percent of workers contribute once a year and 6 percent contribute less than once a year. Over one in 10 (13 percent) never add to their emergency savings.
Just as they are more likely to have more funds in their emergency savings, higher income workers are more likely to contribute to their savings more frequently. Half (50 percent) of workers who make less than $75,000 a year add to their emergency savings at least monthly, compared to 63 percent of workers who make more than $75,000 a year.
3 tips on building your emergency fund amidst high inflation
Building an emergency fund can be a lifeline if your income decreases or you lose your job. Here are three tips on how to start and maintain an emergency fund to prepare for uncertainty.
1. Figure out how much you need in emergency savings
Experts commonly recommend saving three to six months of expenses in case of emergencies. For example, if your monthly bills total $2,000 a month, saving $6,000 will allow you to pay your bills for a short time if you lose your main source of income. This is not a concrete rule; you may need to save more if you are self-employed and anticipate a lean month, or if you are preparing for economic hardship, such as a hiring slowdown or a recession.
2. Open a savings account just for emergencies
Different emergency funds allow you to protect your savings and allow you quick access when you need the money. An online savings account, money market account, money market mutual fund or a separate savings account with your existing bank or credit union can allow you to save emergency funds for the future.
3. Make a budget around savings
You may already have a budget in place to make room for saving more, but make sure you stick to your good habits. Rebuilding your savings, or starting to save for the first time, can be easier by automatically transferring money to your savings each month or taking on side hustles for more income.
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The study (that was conducted January 2024) was conducted by SSRS on its Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a national, twice-per-month, probability-based survey. Data collection was conducted from January 19 – January 21, 2024 among a sample of 1031 respondents. The survey was conducted via web (n=1001) and telephone (n=30) and administered in English (n=1005) and Spanish (n=26). The margin of error for total respondents is +/- 3.6 percentage points at the 95% confidence level. All SSRS Opinion Panel Omnibus data are weighted to represent the target population of U.S. adults ages 18 or older.
The study (that was conducted December 2023) was conducted by SSRS on its Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a national, twice-per-month, probability-based survey. Data collection was conducted from December 15 – December 17, 2023, among a sample of 1036 respondents. The survey was conducted via web (n=1006) and telephone (n=30) and administered in English (n=1010) and Spanish (n=26). The margin of error for total respondents is +/-3.6 percentage points at the 95% confidence level. All SSRS Opinion Panel Omnibus data are weighted to represent the target population of U.S. adults ages 18 or older.
The study (that was conducted in May 2023) was conducted by SSRS on its Opinion Panel Omnibus platform. The SSRS Opinion Panel Omnibus is a national, twice-per-month, probability-based survey. Data collection was conducted from May 19 – May 22, 2023 among a sample of 1025 respondents. The survey was conducted via web (n=995) and telephone (n=30) and administered in English (n=1000) and Spanish (n=25). The margin of error for total respondents is +/- 3.4 percentage points at the 95% confidence level. All SSRS Opinion Panel Omnibus data are weighted to represent the target population of U.S. adults ages 18 or older.
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