High Cost Debt Keeping Many From Having a Savings Account

By: JoAnn Merrigan | WSAV News 3
Published: March 15, 2011

A new survey says people with credit card debt as well as other high cost consumer loans have a harder time putting any money into savings. The survey confirms what many already know, that for a lot of Americans - having a savings account to fall back on is getting harder.

The survey, from America Saves and Experian® also says a "surprisingly high percentage of Americans (16 percent) have very expensive payday, car title, or pawnshop loans."

America Saves and Experian® are planning an awareness campaign to urge savings, especially through regular transfers from paychecks or checking into savings.

The survey included just over 1,000 American adults and was conducted by Opinion Research Corporation on November 5-8, 2010. (The margin of error is plus or minus three percentage points.)

Some of the results:

55% of respondents say they have a hard time saving a portion of their paycheck.

69% of moderate-income households ($25,000-50,000 annual incomes) said it was exceptionally difficult to save anything.

Difficulty saving is often linked to high-cost debt. First, 66 percent of those with credit card debt said they couldn't save. About half (47 percent) without a lot of debt also said they had problems saving a portion of their paychecks.

And 63 percent of those with very expensive payday, car title, or pawnshop loans were having a hard time compared to 53 percent without these type of loans.

Those without savigns often rely on using a credit card for an unexpected bill, such as a car repair. When asked about a car repair that might cost up to $1,000, 43 percent of those who said they have problems saving money- said they would have to borrow to pay this bill. But only 13 percent who are saving said they would need to borrow to make the payment.

High Cost Debt Keeping Many From Having a Savings Account

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