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For many Americans, credit card debt outweighs savings

For many Americans, including Tennessee and Georgia residents, plastic offers a highly convenient way to purchase products and services. Unfortunately, it is also the easiest way to acquire substantial credit card debt. According to a survey by Bankrate.com, this is true for nearly half of all Americans.

The survey clearly shows a troubling financial trend for the country: only 51% of Americans have enough savings to actually pay off their credit card debts. This is the lowest percentage seen since the survey started in 2011. The survey also showed that almost 30% of Americans had more debts from credit cards than they had in emergency savings, the highest figure in four years.

The numbers indicate a continuous decline in the personal savings rate. According to Bankrate.com's chief financial analyst, the figures reflect the stagnant income, high household costs and long-term unemployment that are impeding the progress of Americans. Personal savings took a beating last November, pegged at only 4.2%, critically nearing the less than 3% experienced in 2007. December's holiday spending probably also compounded the lack of personal savings.

The Financial Security Index, a measure of consumers' financial security, also dropped below 100 to 99.3 in November. Those who were insecure about their level of savings outnumbered those who were secure by an estimated two to one. The survey results were supported by previous research from the Corporation for Enterprise Development, which showed that 44% of American households had less than three months' worth of savings.

High interest rates and creditor harassment also compound credit card troubles. Tennessee residents who wish to find a way out of such trouble can explore filing for bankruptcy. This federally sanctioned process can help consumers pay off debts in a legal way that allows them to keep some assets and property.

Source: CBS News, "Close to half of Americans have more credit card debt than savings," Constantine Von Hoffman, Feb. 18, 2014

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-954-7180
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