Where you live in the United States makes a difference when it comes to paying off credit card debt.
It takes the average New Mexico household nearly twice as long to pay off their credit-card debt as it does households in Massachusetts, according to a new report from CreditCards.com. New Mexico had the highest credit-card burden of all 50 states, while Massachusetts had the lowest.
The disparity comes down to the relationship between debt and income, CreditCards.com industry analyst Ted Rossman said in the report. “The states where residents owe the most on their credit cards (Alaska, Virginia, Texas, Maryland and Connecticut) do not rank among the five highest debt burdens because their median household incomes are higher,” he said. “The problem for people who live in New Mexico, Louisiana, West Virginia, Alabama and Arkansas isn’t just how much they owe, it’s compounded by how low their incomes are by comparison.”
In New Mexico, a household earning the median annual income of $46,744 would take nearly 1.5 years to pay off the state’s average household credit card balance of $8,323. That’s based on the recommended strategy of setting aside 15% of earnings to pay off debt. By following that advice, the typical New Mexico household would end up owing $1,320 in credit-card interest over the course of paying the debt.