Worst States for Credit Card Debt and Personal Consumer Debt
Guide to high consumer credit card debt states
While the new Trump economy is starting to expand and provide wage increases for many Americans for the first time in sixteen years…
…many people who got mired in credit card debts or maybe even IRS or state tax liens,
while struggling to stay afloat during the terrible Obama economy are not able to partake in the new economic expansion due to their heavy debt burden.
Even though the economy is growing, oddly enough, consumer credit card debt is growing right along with it.
The financial scene in the US has now changed.
America is facing an increase in the credit card debts at new record levels.
In fact, it can be seen that consumer debt at the end of the first quarter of this year has increased considerably, reaching an all-time high.
It has now beat the previous record during the 2008 financial crisis.
The credit margin available for the consumers today is way more than what it was a decade ago, thanks to the improving Trump economy, after quite a few years of economic stagnation.
This is major, because the lenders have relaxed their lending standards so as to attract more customers for opting into credit cards.
Thus, many American’s splurge to the maximum and spend inadvertently, completely unaware of the many debts they will fall prey to.
Even if leniency in the lending policies are implemented, it will only pave the way for more consumer debt and credit card debt.
Although the cost of living in each state differs greatly as it is dependent on local economic factors which actually determine how the customers go about their expenses…
…the credit card debt, too, varies in each state.
You Might be Wondering:
What Is An Average American’s Credit Card Debt?
An average American’s credit card debt used to be close to $3,600, which has now risen to $5,700 in 2017 as per data collected from the statistical survey conducted in various states.
It is also proven that every household has some amount of debt with the credit cards they own.
Another interesting point to note is the average age of the people in America who are dealing with the mounting credit card debts each month.
It is surprising to find out that the citizens in the age group of 45-54 are the ones who have huge debts on their credit cards to take care off.
Millennials and old people hold the least credit debt to in their accounts.
An important factor to be considered here upon looking at the amount of credit card debts one is handling…
…is that we can easily spot that people who are not earning a lot, falling prey to these credit debts in comparison to ones whose income is way more than his credit debts.
If a person earns $200,000 a year, and has a debt of $30,000, it may not seem an impossible feat for him to clear that amount.
He has an option of reducing his expenditure in other areas and focus on the debt against his account.
But for an average American who is hardly earning around $30,000 a year, even an amount equalling $5,000 will seem huge and stressful.
He will be drowning in debt for quite a while before he can clear it up.
Only then can he focus on shelling the money out in other areas of expenditure.
The amount of debt is not the only factor of concern for the person trying to clear it off.
The rates of interests that are kept so high in today’s scenario make it nearly impossible to come out of their debts any time soon.
If the principal amount could be cleared off in one year, the rate of interest added to the sum will never let you complete the same in a year…
…it could easily take two or even three years.
To add salt to the wound, the rates of interest are soaring higher and higher each passing year.
Major Factors For High Credit Debt in the US
Avoiding unfavorable details in the credit score is very important because if any such details are reflected in the credit report, it takes a good seven years to repair.
As consumers, you can damage your credit score very easily and getting a high credit score will become an unfathomably tough job.
Many times, a poor credit score results are due to poor using of credit card…
…the problem is with user, not card.
The most important thing to remember with using credit is to always, always, always make your payments on time.
These are the major reasons due to which users fall prey to credit card debts and suffer most of their life, paying the heavy debts with nothing much to save.
This is Crazy:
Using Credit Cards Even When Financially Unprepared
Credit cards are a perfect trap for those customers who get carried away by the various offers and gifts attached to it, whether they win them or not.
The customers are not ready…
…not financially prepared to pay the debts that get accumulated easily with these cards.
Credit cards are seen as unlimited flow of cash,
instead it is a ruthless trap to attract people to fall into.
Once the customer starts paying for his purchases through credit card, it becomes an irreversible habit and debts only keep rising day by day.
It is not just the youngsters, even adults are lured into the credit card trap pretty easily.
Anyone purchasing with a credit card must realize that such shiny, plastic cards can come handy only when there is a steady income coming into one’s bank account.
Also, if the salary is meager, it is again a problem for the credit card owner.
2. Spending More Than What Can Be Handled
Generally, customers start with one credit card and before they realize, they may have added more than two or three.
People sometimes forget to track their spendings and go beyond what they can handle.
It might seem like a wise idea to assign different functions to different credit cards but you should be financially sound and aware of handling different cards.
If you are not smart enough to handle it, be sure not to use more than one card.
For example, you may assign payment for groceries, bills and other essentialities to each card you’ve bought.
Although this helps in budgeting with your expenses, you see how much you are able to buy with your credit card.
It requires a lot of discipline to avoid overspending and incurring debts in return.
If you are unable to use credit cards appropriately, it is best to not use them at all.
3. Debt Is More Than Income
Since the time credit cards have made a boom in the human lives, and changed the course of how people pay for their purchases, the credit card debts are on the rise.
Cashless shopping is one of the major reasons for overspending than the actual income earned.
People tend to forget that the money used for buying things on credit is borrowed money and the actual one.
If consumers do not keep track of what they are spending, pretty soon they will have a knock on their door from companies who are good at credit card debt collections.
If any of this sounds like you and you need a free credit or debt consultation check out…
Consumers should be aware whether their expenses are exceeding their earnings or not.
Sometimes, the time between spending for the purchases using your card and awaiting for its monthly statement is the only means to understand how much you have spent going cashless.
4. Payment Disputes To Tackle
Any late payment or non-payment of credit card debt is reported by the lenders to the credit bureaus.
In case of any dispute on purchase using credit cards, the lender should be contacted as soon as possible in order to resolve the such issues.
5. Major Life Changes That Affect Credit Debts
Major life changing instances such wedding, having a baby, shifting houses and other expensive purchases add on to the credit debts and affects personal finances in a huge way.
It is advisable to plan the budget in such a way that you don’t fall into the credit card debt too soon.
It is wise to use credit cards to one’s advantage and absolute necessity rather than having it as a first go to source for available fuinding.
6. Taking Note of the Fine Print
Every customer should have a an idea of the basic details of the credit card he or she is using.
Important factors such as maximum credit limit, due date of the payment, and the rate of interest charged by the creditor should be given due consideration.
It is also essential how the finance charges and late fees work on the loan or debt against your credit card.
Having a proper knowledge about all these things will surely alert you when you try to go for some off-budget purchases.
Your Focus should always be on having a good credit score.
7. Bad Money Management
It is very essential to have a proper monthly expenditure plan, without which you will not be able to track your spendings and flow of money.
Writing down the monthly expenditure plan gives you a clear ideas as to what are things that are absolutely necessary for now and what are things that can be purchased later on.
You would be taken by surprise when you start taking thoughtful decisions and planning your expenses on your own.
Overspending or having no track of the amount you spend will surely pull you into the credit card addiction and increase your debts.
If you find your self falling further and further behind, with debts piling up,
then it might be time to consider a credit consolidation loan to pay off your credit card debts.
Although it is the most practical solution for eliminating credit card debts,
you want to avoid putting yourself in that position at all costs.
8. Underemployment and Minimal Saving
When you experience underemployment or no employment for quite a while, it is obvious that you would be depleted of your savings pretty soon.
Swiping a credit card everywhere for your purchases would seem like the best solution.
But aware, you will incur more debts than temporary relief.
Credit is not something wherein you get money for free.
It is the borrowed money that will have to be returned back.
You must particularly avoid using credit cards if you care about your savings.
We American’s have this habit of spending more than they earn, taking credit cards as a free supply of money.
If you are unemployed, focus on finding a job, work two jobs even to rebuild your dwindled savings, but do not get into the addictive habit of spending for everything.
There may be medical emergencies or other outlyer events in your life which you cannot avoid.
The medical industry requires immediate payment of bills, and you will have to use your cards when the bill is huge.
This only leads to debts in your case.
You might be in a terrible position, hunting for a credit repair counselor…
…whom as per your expectations, who will have to wave his magic wand and clear off all your debts.
9. Financial Illiteracy and No Clarity of Credit Card Usage
It is unfortunate that traditional schooling doesn’t teach you the actual things in life that can make you successful.
No school will ever sit you down and teach you how to deal with your finances.
Sometimes it is highly important to educate yourself about the market trends and various ways to handle your expenses.
Everyone in the family should have clear idea about monthly budgets and expenditures.
There are many financially illiterate people who have no clarity about how money grows, what are the best saving schemes, and how market works.
Even if you are not a pro in this field, having a sound idea of the same will help you in many ways.
You will not be in a bad shape if you get the backs of spending and saving.
You would never have to contact any credit repair firms who say credit repair made simple by them.
Also it is very important to communicate to the family members about the financial plans and spending procedure you have created for each month.
Ensure that everyone in the family is a aware of the income and also the total allowed expenditure through cash and card.
What is the Bottom Line?
American States With High Credit Debts
Below mentioned are American states that have recorded the highest credit debts for the year 2016-2017.
Although the economies of all these states are sound, the spending habit of the people residing here have gotten themselves into this type of debt.
Maryland is on the top of the list for a very high debt to income ratio calculation.
The residents of this state are known to be very well off and financially sound.
But when it comes to debt, the residents of this state have close to $67,020 as per capita debt. That is, the debt to income ratio is calculated to be 1.84.
The average income of the people in Massachusetts is about $32,352 per annum.
But the total debt they owe is about $59,820 per capita.
Once again the debt to income ratio is recorded to be 1.84.
Here mortgage debt is the major type of debt, which is about 72% of the per capita.
Also, 5.45% of per capita falls under the credit card debt category.
This state records about 75.35% of per capita debts in mortgages and about 6.29% of debts is related to student loan.
Although the state has debts in such forms, it is proved that people here have very low delinquency rates whether they be auto loan or credit card ones.
Oregon has quite a high debt to income ratio equalling to 1.89.
People in this state have $49,550 per capita debt per resident.
The state records approximately 72% of debts in mortgages and around 7% of credit card debt.
District of Columbia:
Major debts in the state are because of educational loans taken out by students.
Total debts come to almost 15%.
This is because more than half of the population are in the age of 25 years and most of them apply for student loans to fund their education.
Utah too has huge number of debts from mortgages.
The residents have close to $52,150 per capita debt out which $38,240 is due to mortgage.
But the state has a low delinquency rate for mortgage debt.
Thus, lenders are always on the lookout for Utah residents to go to for mortgages.
Almost 6.85% of Florida’s debt is due to auto loans and debts.
This state has a total debt to income ratio equal to 1.96.
Also, the median income in this state is $31,664, while the debt per capita is $62,200.
The average income of people in this state is $31,557, while the debt per person on an average is $62,520.
Virginia has low delinquency rates due to which lenders feel safe lending here.
This state also has 7.76% debts in student loans.
This state has debt to income ratio of 2.1. A total of $51,770 is owed in mortgages which is approximately 77%.
And the Winner is?
The debt to income ratio of California is 2.34, which is the highest among all states.
Californians also owe per-resident debt equalling $65,740.
Also, people in this state owe about $51,190 on mortgages.
But Here is the Kicker:
Being in debt or carrying a large amount of debt is no fun regardless of which state that you reside in.
If you find yourself in this situation, where you are just barely making your credit card debt payments each month…
… or maybe you have acquired a tax lien on your business during the slow economy of the Obama years, just know that there is honest, professional help available.
If you would like to get a FREE credit or debt consultation with no obligation the you should follow this link to Cura Debt.
Cura Debt is one of the nations top credit repair and debt consolidation specialists,..
..with many satisfied customers being able to reduce their total debt amount and get on with their lives.
As of this writing we are just getting started into the new year of 2018.
The economy is booming and businesses are rapidly expanding.
Don’t let the debt that you are carrying drag you down and leave you behind the rest of the nation.
Make a promise to yourself that this year will be the year you tackle your credit card debt once and for all!
With that I will leave you with a couple of qoutes that withstand the sands of time.
Ben Franklin once said, “Rather go to bed with out dinner than to rise in debt”.
The great P.T. Barnum once said, “There is scarcely anything that drags a person down like debt.”
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