Report: Rhode Island has slightly lower credit card debt than nation

A NEW REPORT by Creditcards.com found the average household in Rhode Island is carrying $8,162 in credit card debt. That was higher than Massachusetts ($7,994) and Wisconsin ($6,737) but lower than Hawaii ($8,423) and New Mexico ($8,323). / COURTESY LENDEDU

PROVIDENCE – When it comes to credit card debt, Rhode Island isn’t doing too bad – at least compared with other states, a new report shows.

Perhaps more than anything else, however, the report details how much credit card debt Americans are piling up.

The credit card debt in the Ocean State is $8,162 per household on average, compared with a national average of $8,195. When factoring in Rhode Island’s above-average median household income of $63,870 a year compared with $60,336 nationwide, it would take 12 months to pay off the debt, according to the report from Creditcards.com, which describes itself as “the largest marketplace of credit card offers.”

The national payoff average is 13 months. In arriving at the number of months it would take to pay off the debt, the report assumes that households set aside 15 percent of their income for that.

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In paying off credit card debt over that 12-month period in Rhode Island, it would include a total of $901 in interest, compared with a national average of $964 in interest. The report used a 20.8 percent interest rate to calculate the interest totals.

Massachusetts, meanwhile, has the best credit card debt scenario in the nation, according to the report. The average household in the Bay State carries $7,994 in credit card debt, and with a median household income of $77,385 a year, it takes an average of nine months to pay it off, including interest of $708. Others states with comparatively good scenarios include Wisconsin, Minnesota, Utah, and Hawaii.

New Mexico has the worst scenario, the report found. With an average credit card debt of $8,323 and a median household income of $46,744, it would take 17 months to pay off the debt, including $1,320 in interest. Other states with similarly poor scenarios include Louisiana, West Virginia, Alabama, and Arkansas – mainly due to their lower income levels.

The website offered some advice – using a balance transfer card to pay off existing credit card balances and loans by transferring them to another credit card account, typically for a fee, as well as having disciplined spending and a strict budget.

“If used correctly,” said Creditcards.com analyst Ted Rossman, “and that means strictly paying off debt and not making additional purchases, a balance transfer card can save consumers hundreds or thousands of dollars.”

He added that zero-percent offers are available for up to 15 months with no transfer fees.

Scott Blake is a PBN staff writer. Email him at Blake@PBN.com.

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