New numbers from the Federal Reserve show consumer credit debt is once again climbing at a steady pace.
If your home is anything like the average households across America, you owe $4,965 to credit card lenders. The good news for our region is eight of the 10 states with the lowest credit card balances are in the Midwest.
Spenders in Iowa consistently carry the least amount of credit card debt at $3,885. South Dakotans are close behind along with the responsible spenders in Nebraska. More bonus points for Nebraska, the credit card delinquency rate of 0.44 percent is fourth lowest in the country. Colorado carries some of the highest credit card debt per person at $5,625.
Channel 6 News reported this week that UNO enrollment is at a 20-year high, so it comes as no surprise that the amount of money going out in the form of student loans has soared. We're also taking out more money for things like vehicle loans. One credit advisor says five or six years ago, consumers put new wheels on the back burner and they're finally getting around to replacing those older vehicles.
"People are going back to buying more new cars and that says that they believe that their personal finances are under control enough that they can take on that king of extended debt,” says Credit Advisors Foundation Director of Programming Michaela Harper.
She says parents go wrong when they offer to take out student loans in their name instead of putting it under the name of their children.
"You don't get the breaks on the interest. You can't set up income-based repayments, you can't get loan forgiveness. If your student decides to join the Peace Corps, but you took out the student loans in your name, the $10,000 credit a year they get toward student loan debt that the Peace Corps gives every year is not open to you ‘cause it's not in the student's name."
That being said, Harper points out that parents are more than welcome to help pay off their children’s loans, but try to keep them in the student's name.
A study shows more people would be willing to talk to a stranger about politics, religion, salary and even their love life than about credit card debt. It's time to face the music and see if we're on track with what the pros recommend credit-card wise.
First of all, they say we should never put the basics on our credit card, including rent, electricity and car payments, gas or groceries. Stay below 30 percent of your credit card spending limit.
One way to avoid going too high in the first place is to make sure your combined credit card limit for your entire household does not exceed your monthly income. So if your take home pay is $6,000 a month, credit counselors say you should not have that card with a $10,000 limit. Credit card companies often raise your limit automatically, but we as the consumer can say no, I do not want a raised limit.
Women are more at risk to incur credit card debt and to run into trouble with late fees than men.