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Most adults understand it is a bad idea to take on too much debt, if it can be avoided. Credit card debt, in particular, can become problematic. But the key is whether it CAN be avoided for those who are struggling financially. A new report by WalletHub, "2023's States with the Highest and Lowest Credit-Card Debts," suggests at least in Ohio we're doing relatively well on that front.
The Buckeye State ranks 46th -- with $2,375 median credit card debt; $248 cost of interest until payoff; and 11 months and 27 days until payoff (if there are no new expenditures).
"Americans aren't all in the same boat when it comes to credit-card debt, though," writes report author Adam McCann. "People in some states charge less than others, whether because they have been less impacted by inflation, they are more responsible about their finances or a number of other factors."
Ohio's median income, as listed on the report, is $51,482, yet we are near the bottom of the list for median credit card debt.
Meanwhile the "state" with the highest median earnings for full-time workers is the District of Columbia; but it also has the second-highest median credit card debt.
"There are two major reasons. First, people who start accumulating credit card debt often do not have a choice. Unexpected expenses, such as unforeseen medical or other emergencies, may push people to overextend and spend more than they can pay back in time," said Paul Obermann, an assistant professor at Idaho State University. " … The second reason is poor budgeting. Most of us own at least one credit card (probably more), and it takes a lot of effort to track how much is owed and make payments before interest kicks in. … Given the high interest rates on credit card debt, once interest is owed, it is often a downward spiral from there …"
It seems here in Ohio many people have done a good job of avoiding all that. Perhaps it has something to do with our cost of living, perhaps it is a sign our economy is getting healthier, or perhaps it is an indication some of our financial education efforts are taking hold in tandem with a natural tendency to be responsible about our money.
Whatever the reason, Ohioans should take the data as a sign that we are on the right track; and as inspiration to keep working for even better.