US credit card debt now over $1 trillion. How to cut down your debt
The milestone comes as credit card interest rates exceed 20%.LEARN MORE
About 36% of U.S. adults say they have less than $1,000 in their savings accounts.
Over half of Americans claim they're nowhere near achieving their definition of financial freedom, according to a study by digital personal finance company Achieve.
Americans define financial freedom modestly, but only 1 in 10 say they are living their definition of it.
Half of Americans describe "financial freedom" as being comfortable, but not necessarily rich, and 49.3% say it refers to meeting financial obligations and having some money left over each month. About 54.2% define it as living debt-free, and 46.2% believe it means never having to worry about money.
Americans are feeling financially insecure amid an evolving economic landscape, a potential recession looming and credit card debt in the nation surpassing $1 trillion, Achieve said. Student loan debt is also hanging over the heads of many Americans whose repayments are expected to pick back up in the fall.
In the first quarter of 2023, American household debt surpassed a record $17 trillion, according to the Federal Reserve Bank of New York.
"We're seeing far fewer Americans with the goal of becoming 'rich' and many families pivoting to just trying to be able to pay their bills on time. With all of the economic pressures facing American families, financial freedom is currently more about making ends meet," Brad Stroh, co-founder and co-CEO of Achieve, said in a press release. "Reaching financial stability is particularly challenging for consumers living with debt."
Having an adequate savings account seems to be a weak spot for consumers. About 40% say they don't have a basic savings account. Among those who do, 36% say they have less than $1,000 in their savings.
Rising prices and the highest interest rate in more than four decades only makes it harder for people to make ends meet, let alone put money aside. Americans in the workforce are asking for more money from employers.
The average lowest wage Americans said they would be willing to accept for a new job was $78,645 in July 2023, according to data from the Federal Reserve Bank of New York. That's a nearly $6,000 jump from the same period a year ago.
Student loan repayments are resuming, and some borrowers are considering boycotting to refuse to pay.
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