Washington has the third highest credit debt in the nation
BELLINGHAM — By early 2022, Americans had accumulated over $1 trillion in credit card debt, but not all states carry the same weight or debt as others, according to a recent study by WalletHub, a personal finance website.
The study compared all 50 states and the District of Columbia using TransUnion credit data to determine the total cost and time required to pay off medium-sized credit card debt.
Washington state had the third highest credit card debt in the country with a median credit card debt of $2,471 and a payback time of 14 months and 21 days.
The state with the highest debt was Alaska, with an average credit card debt of $3,206 that will take about 17 months and 27 days to pay off.
The states with the lowest credit card debt were Mississippi, Arkansas, West Virginia, Iowa, and Louisiana, with a median debt of just $1,806.
The study also surveyed professionals for their insights into credit card debt and how easily it can be reached, and incorporated their expertise into the report.
Most people don’t realize when debt is piling up and don’t calculate the cost of mounting debt, Rosabeth Moss Kanter, an Arbuckle professor at Harvard Business School, said in the report.
“Poor budgeting, impulse buying, and general spending in excess of earnings are behaviors that can lead people to massive credit card debt,” said Mauricio Rodriguez, a professor of finance and real estate at Texas Christian University, in response to the report.
How to get out of credit card debt
Getting stuck in credit card debt can be easy, but getting out of it can be extremely difficult.
The Washington State Office of the Attorney General advises Washington residents who have debt to consult a credit counselor, but to make sure it’s legitimate. Selecting a credit counselor can be risky, but the US Department of Justice’s US Trustee Program has a list of federally licensed credit counseling agencies.
The bureau also encourages Washington residents to be extremely cautious when looking at “credit repair” clinics and companies that promise to repair your credit while charging you exorbitantly high fees.
The Federal Trade Commission offers advice on paying off credit card debt:
■ Talk to your credit card company to try to create a modified payment plan that you can manage.
■ Contact a credit counseling firm for help or advice.
■ Research debt service companies and assess the risks associated with the programs.
Chase Bank tips to help you pay off your credit card debt:
■ Know your budget by tracking your income and expenses.
■ Understand your debt by listing your credit card debt, minimum payments, and APR.
■ Choose a strategy to reduce credit card debt. The snowball method focuses on paying the most on the credit card with the least debt first to pay it off in full, while only paying the minimum amount on all other cards. Once the card is paid off, you pay off the next card with the lowest total debt. The Avalanche method targets the credit card with the highest APR first, while paying the minimum amount on all other credit cards. Once the card is paid off, target the card with the next higher interest rate. With the avalanche method, you can fight one of the biggest debt contributors, interest payments.
■ Automate your payments and match them to your paychecks whenever possible.
■ Look for alternative ways to pay off credit card debt. Check whether debt counseling services, transfer credit cards, debt consolidation loans, home equity loans, or lines of credit might help.
■ Cultivate a healthy credit lifestyle and establish a sustainable, healthy and affordable credit lifestyle.
■ Block or block your card if you want to avoid further debt. If you need to block your card to limit your own spending, you can ask your bank to freeze your account or block your card, but make sure you don’t close your account. This can benefit your credit utilization rate, average account age, and credit mix, all of which can benefit your credit score.