Californians Top List of Most Indebted Americans
A recent report by New York Comptroller Thomas DiNapoli shows that California tops the list of Americans with the most credit card debt. In total, Californians had more than $106.8 billion in credit card debt as of December 2017, according to the Associated Press.
Texas came in at number two with $67.3 billion, followed by Florida ($59.2 billion) and New York ($58.1 billion).
The fact that these four states ranked so high on the list is not surprising, as they are the four most populous states in the country.
Other states in the top 10 include Pennsylvania ($33.2 billion), Illinois ($32.2 billion), New Jersey ($29.6 billion), Ohio ($26.7 billion), Virginia ($26.5 billion) and Georgia ($26.3 billion).
Individuals carrying credit card debt in these states may wish to consider paying off that debt as soon as possible. In March of this year, the Federal Reserve raised the interest rate from 1.5% to 1.75%, the first of three gradual rate increases expected this year.
Those seeking to get out of debt should first track their spending for a month to determine where they can make spending cuts so they can devote more of their income to paying down balances and ensure that frivolous purchases aren’t leading to more credit card debt.
After expenses have been tracked and a realistic budget is made, cardholders should pay off their card with the highest interest rate first while making the minimum payments on their other cards. When the first card is paid off, they should take the amount they were making on that card and devote it to the card with the next highest interest rate, and work their way through all cards in this manner.
If the interest rate is the same on all cards, consumers should pay off the card with the lowest balance first, as the positive reinforcement of paying off that card will help them keep the momentum and pay off all of their debt.