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Card debt hinders savings

By Lucy Lazarony · Bankrate.com
Tuesday, March 22, 2011
Posted: 1 pm ET

Americans with credit card debt, payday loans and other high-cost consumer debt are more likely to have difficulty saving, according to a new national survey.

About two-thirds of Americans with credit card debt reported having difficulty saving a portion of their paycheck, according to a survey by America Saves and Experian, a major credit reporting agency.

And 63 percent of those surveyed with payday, car title or pawnshop loans reported having difficulty saving.

Forty-three percent of Americans who reported having great difficulty in saving money would need to use credit to pay for a $1,000 car repair bill.

Having an emergency fund can help take the stress out of unexpected expenses. In fact, it's a good idea to keep a small emergency fund even when paying down credit card debt, according to Bankrate Debt Adviser Steve Bucci. These five tips will show you how to build emergency savings.

According to the Bankrate Financial Security Index in February, 23 percent of Americans said they had more credit card debt than emergency savings.

For more information on managing debt and building savings, consider these financial strategies.

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