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Study Shows Where It’s Hardest To Pay Off Credit Card Debt

[Friday, November 3rd, 2017]

If you live in Florida or Georgia, chances are, you have a harder time paying off credit card debt than folks in Iowa and Nebraska.

That’s according to a new survey by Debt.com that reveals which states have higher or lower average credit card debt relative to the median income. In places where people have high credit card debt and low incomes, like Florida and Georgia, it will be harder to manage that debt. In the Midwest, such as Iowa and Nebraska, incomes are also low, but so are credit card debt levels.

Howard Dvorkin, CPA and chairman of Debt.com, said the average household that uses credit cards has credit card debt of over $16,000. “We decided to look at which states were in ‘credit hell’ with the highest credit card debt relative to income,” explains Dvorkin. His team used data from the Federal Reserve and the U.S. Census Bureau and calculated the length of time it would take to pay off debts, including total interest charges, based on an average minimum payment schedule.

A low APR credit card is key

No matter how much you earn or what your credit card debt level is, having a low APR credit card will help you pay off debt faster. In a state like Alaska, where there is high median income ($72,723), there is also the highest credit card debt per capita. In Mississippi, however, where the median earnings are a more modest $41,099, the credit card debt per capita is also quite low ($1,850). That means having a low APR in either state will help folks get out of debt faster.

One way to pay debt off quickly is to apply for a balance transfer credit card with a 0% APR promotional offer that’s good for several months to over a year. By doing this, many people are able to pay off all of their credit debt within the introductory period, saving themselves thousands of dollars in interest payments. These cards charge a modest fee to transfer the balance, but if you are carrying a high interest credit card, it’s worth it. A low-APR credit card is the absolute best one to have if you are going to carry a balance from month to month.

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