Missoula has 5th Least Sustainable Credit Card Debt in USA
Missoulians have been going on a credit card spending spree in 2021 according to the financial website Wallet Hub, and the result is that Missoula has the fifth least sustainable credit card debt in the U.S.
Analyst Jill Gonzalez spoke to KGVO News on Thursday after the survey was released.
“Unfortunately in Missoula, the news is not great,” said Gonzalez. “Right now Missoula has the fifth least sustainable credit card debt in the country. Cities like Miami, Knoxville and Gulfport are ahead of it. Basically it means that that we see high median credit card debt per household, and judging on what the income is there, it looks like it's going to take a long time to pay that off.”
Gonzalez provided the down and dirty facts of what its going to take to pay off the average high interest credit card in Missoula.
“Well, its 73 months and nine days to pay off the median credit card debt in Missoula, so the median credit card debt is around $2,200,” she said. “The cost to pay that off additionally is around $1,200 in interest, and that's where we get that 73 months figure.”
Gonzalez said most Americans spent up a storm in 2021, with pandemic relief funds running out, we turned to the plastic to pay our debts.
“America started 2021 with more than $900 billion in outstanding credit card balances,” she said. “And 2021 was really a year of big spending. So throughout the year, we're projecting that we'll see another $100 billion in credit card debt. That's new debt. And that's a lot more than what the typical average which is around $45 billion.”
There are many strategies to pay off credit card debt, whether it’s through Dave Ramsey or other programs, but Gonzales favors what she calls the ‘avalanche approach’.
“I like to call it the avalanche approach,” she said. “I think it's a mistake that most people make that if they do have any cash leftover from their expenses, they might sprinkle it across all of their credit cards. But to be strategic, you really want to go after the one with the highest interest rate first, and put any extra money toward that. “Pay the minimum balance on every other card until that's paid off and then do the same thing with the next highest interest rate. That way you're paying things off strategically. You can keep track and you're doing it in a way that’s going to cost you the least amount of money.”
Credit card debt fell by $82 billion during 2020, and Wallet Hub now projects an increase of $70 billion in 2021.