Marlena Telvick, PBS
As credit card companies face new regulation from Washington, FRONTLINE examines the future of the massive consumer loan industry.

One in four Americans has more credit card debt than emergency savings, according to a Bankrate.com poll released today.

The report also shows that only 54 percent of Americans have less credit card debt than emergency savings and 16 percent have neither.

“Emergency savings remains a problem area for many Americans, which leaves them only one unplanned expense away from having high-cost debt,” Greg McBride, CFA and senior financial analyst at Bankrate.com, said in a statement. “Long-term unemployment, stagnant wage growth and rising household expenses are all contributing to this trend. As difficult as it may be to boost savings, having an adequate emergency savings cushion is critical to maintaining financial stability, and Americans need to find ways to sock away more cash for a rainy day."

Consumers are also continually viewing their financial situations as negative.

Among those polled, 27 percent of Americans said they have a lower level of financial security compared to a year ago, while 24 percent report a higher amount. Despite four months of improving sentiment, 38 percent of Americans said they are less comfortable about their savings vs. last year, and only 14 percent are more comfortable.

As emergency funds slip consumer debt rises, adding to the heavy burdens of borrowers.

A report from the Federal Reserve showed that revolving credit rose to a 4.1 percent annual rate in December, rising almost $3 billion to $801 billion, according to The Birmingham News in Alabama. The revolving credit primarily consists of credit card debt.

“These credit card debt numbers are a concern but it's too early to tell whether we are all falling back into the trap of spending more than we can afford," Bill Hardekopf, president of Birmingham-based Lowcards.com, told The Birmingham News. "People certainly charged more this Christmas than last year."

As debt rises, legislators in Washington are working on capping off the credit card rates in America.

The National Credit Card Usury Rate, H.R. 4084 proposed by 12 House Democrats last week, would cap the interest rate at 16 percent, according to The Hill. The bill also limits late payment or insufficient funds charges to $15.

"During these challenging economic times, American families have been forced to make tough choices to make ends meet," Rep. John Tierney (D-Mass.) told The Hill. "Many are forced to put everyday expenses such as their utility, grocery or medical bills on their credit cards just to stay afloat.

"Far from helping struggling consumers, credit card companies appear to be exploiting this debt cycle by increasing interest rates to as much as 30 percent and piling on fees."

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