Intro: How does your emergency savings stack up against the amount of credit card debt you may have? That is the question Bankrate.com asked consumers in conjunction with February's Financial Security Index and here with details is Greg McBride, senior financial analyst for Bankrate.com.
So Greg, what did Bankrate.com find?
Greg: Lucas, despite consumers' efforts to pay down debt, the amount of credit card debt in relation to the emergency savings they have really hasn't changed all that much in the past 2 years. Currently, just 55% of Americans have more in emergency savings than in credit card debt and about 1-in-4 has more credit card debt than emergency savings. Those numbers are little changed from each of the past 2 years.
Last month we saw a big increase in the Financial Security Index, but you cautioned that it might not last. What did we see this month?
Greg: The Financial Security Index did drop, from 98.6 to 96.8, surrendering most of the improvement we had seen in January. Readings on 4 of the 5 components – job security, savings, debt, and overall financial situation – all declined from one month ago and each shows that consumers feel deterioration over the past 12 months.
You mentioned that 4 of the 5 components declined. What is the one area that did improve?
Greg: Thanks to rebounding home prices and the buoyant stock market, net worth was the only component to show improvement from last month. What's more, is that net worth is also the only component where more Americans report feeling that things are better rather than worse compared to one year ago.
Thanks Greg. For more information on this month's Financial Security Index and to see how you stack up to other Americans, visit our website, Bankrate.com. I'm Lucas Wysocki.