Almost half of Americans can handle a $1,000 emergency, such as a medical bill or car repair, by dipping into savings. Another 37% say they would use a credit card, take out a personal loan or ask family for financial help to handle unexpected expenses, according to a new poll from Bankrate of over 1,000 U.S. adults. Only about 3% of respondents say they don't know how they would handle a $1,000 emergency. That's in line with other research. Last year, about 61% of American households said they would pay for an unexpected $400 expense with cash, savings or a credit card, the Federal Reserve found. About 12% said they would not be able to cover the expense at all.

But Americans' emergencies, on average, cost more than $1,000, Bankrate finds. The average unexpected expense for survey respondents was about $3,500. And these situations are not uncommon. Within the past year, 28% of people experienced a financial emergency. Putting that type of expense on a credit card or taking out a loan may end up being a "high cost" solution, says Greg McBride, Bankrate.com's chief financial analyst. The average credit card APR is currently 17.30% and the average interest rate on a personal loan was 10.07% in September, according to loan marketplace Credible. With those types of interest rates, it's more important than ever to build up emergency savings. "Whatever savings you can accumulate acts as a buffer from high-cost debt when unplanned expenses arise," McBride says. But for many, debt is already a problem, which makes saving challenging. Americans over 18 owe about $29,800 on average, excluding home mortgages, according to Northwestern Mutual's 2019 Planning & Progress Study. About 15% of people believe they'll be in debt for the rest of their lives. Emergencies play a role in racking up this debt. A third of Americans say they're still in debt from borrowing money to pay for a previous crisis, LendingTree finds. Of those who are still carrying debts from earlier emergencies, 33% owe $5,000 or more, while almost 20% owe over $10,000.

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