Income plays a role in determining credit card debt burden
To properly assess the impact of credit card debt in Mississippi, it’s important to compare debt levels with income levels. There is often a disparity in the American South. According to a study by CreditCards.com, however, New Mexico is the state most burdened by credit card debt. Massachusetts residents were the least burdened by such debt. The median income in New Mexico is $46,744 while the median income in Massachusetts was $77,385.
Residents in both states owed roughly the same to credit card companies, but New Mexico residents took nearly twice as long to pay down their balances. It took roughly 18 months for households to repay an average balance of $8,323. Households in Massachusetts took about nine months to repay an average balance of about $8,000. This assumes that a family was putting aside 15 percent of its earnings to repay money owed to creditors.
Differences in income also meant that the states such as Maryland or Virginia with the highest overall balances were not among those with the heaviest debt burden. American households as a whole average about $7,000 in credit card debt, according to a report from NerdWallet. To keep debt in check, individuals can choose to use a debit card or pay for items with cash. It may also be possible to transfer balances to a credit card with 0 percent interest.
Individuals who are going through financial challenges may find relief through bankruptcy. Bankruptcy could allow a person to retain assets or avoid having them liquidated as part of the debt repayment process. This means that a debtor may keep a home or equity in a home until a bankruptcy case is over. Furthermore, creditors may generally not engage in a repossession or a foreclosure until a case is closed.