Here’s how long it could take average Floridian to pay off $8,600 in credit card debt
State’s consumers rank 7th highest in credit card debt burden in U.S.
ORLANDO, Fla. – Florida consumers have the 7th highest credit card debt burden in the United States and could take up to 15 months or more to pay off their bills, according to new research by CreditCards.com.
New data shows area residents’ median income of $55,462 is the 14th lowest in America, while Florida’s average household credit card debt stands at $8,620, essentially a debt to income mismatch.
CreditCards.com analyst Ted Rossman said the spending by credit card has led to debt that could take years to get under control.
“The problem is people aren’t getting ahead,” Rossman said. “People in credit card debt owe as much now as at any point in the last 10 years.”
Veteran Central Florida certified financial planner Nancy Hecht told News 6 the interest rates associated with credit card purchases is a recipe for post-holiday sticker shock.
“What gets people in trouble is the interest,” Hecht said. “They end up having a balance of $5,000 (in) actual dollars they spent and $8,000 in interest so now they have a $13,000 credit card bill.”
Rossman agreed credit card purchases can erase a great sale if you don’t pay the bill when it arrives.
“Credit card interest rates are really high," Rossman said. “We see them average between 17 percent on the low end to about 25 percent on the high end.”
Based on the state’s median annual household income, CreditCards.com projected it would take a Florida consumer 15 months to pay off an $8,600 credit card debt while paying the monthly minimum.
According to Rossman, the consumer would need to set aside 15 percent of their income to achieve that payoff with roughly $1,900 in interest added to their bill.
An interest free credit card offers a quick start to pay the credit card bills without interest fees added to the bill.
Rossman’s team has compiled a least of zero interest credit cards that offer various windows of time to pay down the monthly debt interest free.
There are fees associated with the debt transfers but the payments are interest free.
News 6 does not recommend a credit card program but does ask that consumers check the fees associated with the zero interest credit card options.
Hecht urged consumers to review their holiday budget and start planning for next year.
“After this holiday season, look at how much did you actually spend and start now budgeting for Christmas 2020 so you can actually pay cash for it (gifts) and not keep the (charge) cycle going," she said.
For more information on current zero interest credit card options, click here.
You can read Hecht’s financial blog here.
Copyright 2019 by WKMG ClickOrlando - All rights reserved.