Americans carry $905 billion in credit card debt, according to recent analysis by personal finance website NerdWallet. That's approximately $7,316 per household, 2.8% higher than last year, but that's not actually the whole story.

Since not all households have credit card debt, the picture for those that do is actually worse. Households with credit card debt owe $15,654, down 1% from 2016.

That data is a bit bleak, but there is some good news. Nearly 6 in 10 Americans (58%) have enough money in emergency savings to pay off their credit card debt, according to a new survey from Bankrate

A pile of multicolored credit cards.

It's important to pay off your credit cards and have an emergency fund. Image source: Getty Images.

What did the survey say?

On the negative side, 21% of the 1,009 respondents said they lacked the savings to pay off their credit card debt. Another 12% said they have no savings or credit card debt.

"As unemployment declines and household income rises, more households are making progress on boosting savings, paying down debt or both," said Bankrate.com chief financial analyst Greg McBride in a press release. "Having no credit card debt and no emergency savings is a sign of trouble, not a badge of honor. A lack of emergency savings is indicative of living on the financial edge."

In reaching 58%, the number of Americans whose emergency savings fund exceeds their credit card debt tied 2015 as the best number seen in eights years of this survey being conducted. That's up from a low of 52% in 2016 and 2017. Conversely, the 21% who don't have enough in savings to cover their debt and the 12% who have neither credit card debt nor savings are also eight-year lows.

Effort is improving

More than half of Americans (53%) said they are placing a higher priority on building their emergency savings. In addition, 40% of those surveyed said they are more motivated to pay down debt while 3% plan to concentrate on both at the same time.

Surprisingly, Millennials (ages 18-37) come in second when it comes to the age group most likely to have more emergency savings than credit card debt falling behind only those 73 and older at 61% and 67%, respectively. Millennials were also the most-focused on emergency savings with 61% calling it a "high priority."

Generation X (ages 38-53) and Baby Boomers (ages 54-72) have a higher tendency than other generations to have neither credit card debt nor emergency savings (13% and 15%, respectively). In addition, people with more income and more highly educated households have a higher likelihood of having more in emergency savings than debt. Making increased savings a priority is at the same level (54%) across all age groups. 

What can you do?

Available credit is not the same as having an emergency fund. Everyone should work toward paying off high-interest (credit card) debt first, then strive to build a six month reserve. That sounds like a daunting task, but it's one that can be accomplished by taking small steps.

Pay down your debt as part of your household budget and be diligent about it. Make changes to your spending and commit to eliminating debt, then building up an emergency savings fund. Think of it as a series of small goals, steps toward financial security that can be accomplished.

 

 

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