Study Reveals States With Most Debt

There may be sunny skies in Florida, but life isn’t all smooth sailing and frolicking on the beach. The state has one of the highest credit card debt burdens in the nation, according to a recent study.

In fact, the so-called “Sun Belt” includes four of the five states with the highest average consumer debt. In addition to Florida, there’s Texas, Georgia, and New Mexico. However, the state with the number one biggest credit card debt burden is far from sunny: it’s Alaska.

The study looked not only at average credit card debt, but also at median income state by state. So while Florida’s average credit card debt per consumer ranks only 18th in the United States, its lower median income put it on map for having one of the highest debt burdens. The median income in Florida ranks 41st among the 50 states.

Florida’s average credit card debt per cardholder is $5,603. If a person paid only the minimum due on that amount each month, it would take nearly 13 years to pay it off, and cost more than $3,600 in interest charges.

A solution for high interest

One thing folks can do to pay off credit card debt faster and pay less in interest is to transfer their balance to a new credit card with a zero-interest promotional offer. These let cardholders chip away at debt without paying a cent in interest, often for an introductory period of up to 18 months.

Balance transfer credit cards sometimes charge a transfer fee, but this is usually well worth paying, if you do the math. A fee of three percent or ten dollars, whichever is higher, is typical. Someone transferring several thousands of dollars worth of debt will definitely save on interest charges, even considering the transfer fee.

States with the least debt

On the other side of the spectrum, the five states with the lowest credit card debt burdens are Wisconsin, Massachusetts, Minnesota, Iowa, and North Dakota.

To get an idea of the difference between an average Alaskan cardholder and the average North Dakota cardholder, look at it this way: if they paid fifteen percent of their gross monthly income to their credit card debt, the Alaskan would take 20 months to pay it off in full, and would pay $992 in interest. The North Dakotan would pay it off in 12 months and lay out only$370 in interest.