Iowa Has 2nd Lowest Credit Card Debt
You read that right. Iowa has the 2nd lowest credit card debt to cost-of-living ratio. Well ain't that swell. It is if you don't have any credit card debt, but what does that fact really mean.
The website CardRatings, who educate consumers about credit cards, just came out with the results of their new study looking at credit card debt and cost-of-living ratios to determine whether or not those two things are related. Well, they certainly are.
People in more expensive states generally have $594 more credit card debt than those in less expensive states. After adjusting median income for cost-of-living and taxes, this made for a debt burden that was 22 percent heavier in more expensive states.
States such as Hawaii, California and Alaska with especially high costs of living had ratios of debt-to-adjusted income of around 20% or more, compared to the overall average of 15.9 percent.
The study also looked at the relationship between education and unemployment to credit card debt. Unsurprisingly, states with high unemployment also had higher average credit card debt, suggesting that people do lean on credit cards to make ends meet when they are between jobs.
That said, states with higher percentages of college graduates also showed higher credit card debt overall. States with high percentages of college graduates had an average credit card balance $573 greater than states with lower percentages; the percentage debt burden in states with higher levels of college grads was more than 16 percent higher.
Click HERE to read the full article and check out other states and where they fall in this study.