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Most adults understand it is a bad idea to take on too much debt, if it can be avoided. Credit card debt, in particular, can become problematic. But the key is whether it can be avoided for those who are struggling financially. A new report by WalletHub, 2023's States with the Highest and Lowest Credit-Card Debts, suggests states in our region are doing relatively well on that front.
Ohio ranks 46th -- with $2,375 median credit card debt; $248 cost of interest until payoff; and 11 months and 27 days until payoff (if there are no new expenditures.) Pennsylvania, meanwhile, is 48th --with median credit card debt of $2,439; $249 cost of interest until payoff; and 11 months and 15 days until payoff. West Virginia comes in 51st -- with median credit card debt of $2,131; $211 cost of interest until payoff; and 11 months and three days until payoff.
"Americans aren't all in the same boat when it comes to credit-card debt, though," writes report author Adam McCann.
"People in some states charge less than others, whether because they have been less impacted by inflation, they are more responsible about their finances or a number of other factors."
Rankings from the Washington, D.C.-based personal financial website included the District of Columbia, which has the highest median earnings for full-time workers and has the second-highest median credit card debt.
"There are two major reasons. First, people who start accumulating credit card debt often do not have a choice. Unexpected expenses, such as unforeseen medical or other emergencies, may push people to overextend and spend more than they can pay back in time," said Paul Obermann, an assistant professor at Idaho State University.
" … The second reason is poor budgeting. Most of us own at least one credit card (probably more), and it takes a lot of effort to track how much is owed and make payments before interest kicks in. … Given the high interest rates on credit card debt, once interest is owed, it is often a downward spiral from there …"
It seems here in our Tri-State Area, many people have done a good job of avoiding all that. Perhaps it has something to do with the cost of living, perhaps it is a sign our economy is getting healthier or perhaps it is an indication some of our financial education efforts are taking hold in tandem with a natural tendency to be responsible about money.
Whatever the reason, residents of our region should take the data as a sign that we are on the right track -- and as inspiration to keep working to do even better.