Utah Is 43rd! (And This Time It’s Good)

This came up on the radio show yesterday, and it's one case where having a low ranking status in Utah is, at least in my view, a good thing. According to this report from Credit Card. Com, Utah ranks 43^rd in terms of debt burden in the U.S.

The metrics take several factors in to consideration in making the rankings. For example, if you look strictly at the amount of credit card debt on a state by state basis, Utah is more in the middle of the pack instead of being towards the bottom.

What the people at Credit Card.Com was take the average amount of credit card debt, compare it to the average household income in that state, and calculate how long it would take to pay of the credit card debt if five percent of that income was applied to that debt.

Based on that, average credit card debt in Utah could be paid off in 15 months. No state, by this metric, would be able to clear credit card debt in a year, but Massachusetts came close at 13 months. The state where it would take longest to pay off credit card debt is Mississippi, where the average time to pay off the debt would be 22 months.

I found it worthwhile to read through the information. In the report they call credit card debt in the country “dire.” And with interest rates climbing, relief is not likely forthcoming. If it has been awhile since you have checked the interest rate in your credit cards, it might be worth getting an update.

Credit card debt can be an overwhelming burden that weighs heavily on individuals and families alike. In today's consumer-driven society, credit cards have become an integral part of our financial lives, offering convenience and flexibility. However, with their ease of use comes the danger of accumulating debt that can quickly spiral out of control.

One of the most significant challenges of credit card debt is the high-interest rates associated with it. Credit card companies often charge exorbitant rates, making it difficult for individuals to pay off their balances.

According to this report, the average credit card interest rate for newly opened cards is at an all time high of 20.69%. This means that even small purchases can turn into long-term financial obligations, as interest continues to accrue month after month. As the debt grows, so does the stress and anxiety of trying to keep up with payments.

The burden of credit card debt also extends beyond the financial realm. It can take a toll on mental and emotional well-being.

Constantly worrying about money, living paycheck to paycheck, and feeling trapped in a cycle of debt can lead to sleepless nights, anxiety, and even depression. It can strain relationships as financial pressures mount, causing conflict and tension among family members.

One of the most liberating days of my life was the day we sent out the last check and became debt free.

Moreover, credit card debt can hinder future financial goals. With a significant portion of income going towards debt payments, individuals find it challenging to save for emergencies, invest for the future, or achieve other financial milestones. The burden of debt becomes a barrier to financial freedom and stability.

Escaping the clutches of credit card debt requires discipline, sacrifice, and a well-thought-out plan. It often involves creating a budget, cutting back on unnecessary expenses, and finding ways to increase income. Seeking professional advice from credit counselors or debt consolidation services can also be beneficial in formulating a debt repayment strategy.

I totally understand the curve-balls that come at us in life, and that sometimes we have to dip in to our credit resources. When I was faced with a period of unemployment some time ago we did run up credit card debt just to get food and some of the necessities. And we paid a deep price for it. And, of course, there will be a time when taking on debt makes sense, such as in the purchase of a home.

But that kind of debt is not credit card debt and, even in the situation we are in today, carries a lower interest rate than the typical credit card.

I won't argue or criticize people who are paying a mortgage or making a vehicle payment. But I would offer this council to those carrying credit card debt. Pay it off as soon as you can. Start with your highest interest credit card and get that balance down to zero. Then start with the next highest one, if there is a second.

It may not have quite the impact of what you hear on the Dave Ramsey show, but I can't help but think that you wouldn't feel a great deal of satisfaction and freedom by being able to scream, “I'm credit card debt free!” Then you can work on the rest.

Now, when do you think we will get the government to take the debt free pledge? Wait, I think I know the answer to that one.

So what are the factors that lead us in to credit card debt? Check out some possibilities below.