A new study is shedding some troubling light on Texans and how they handle credit card debt.
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WalletHub ranked Texas 15th in its study to find states with the longest credit card payoff time.
When falling into credit card debt, researchers say, it’s not usually the cost of an item that puts someone in debt, but the high interest rates.
The estimated payoff time the study used for each state was calculated by using the median credit card debt for a state, the average income for everyone in that state, and the estimated cost of interest a person would pay during the time it takes to pay. To calculate your own estimated payoff time for current or future debt, you can use a free payoff calculator online.
SEE ALSO: Texas has one of the best state economies in the U.S.: WalletHub
One of the biggest takeaways experts mentioned from the study is to not bite off more than you can chew. In other words, try not to spend more than what you have.
“Looking at the median credit card debt in a state can give you a good idea of whether people are struggling or doing well compared to people in other states,” Chip Lupo, WalletHub Analyst, explained. “But it’s also important to look at how much residents put toward paying their debts off each month. Low average payments lead to long payoff timelines, which in turn lead to high amounts of interest accrued.”
In a similar study, WalletHub conducted, 69% of Americans are insecure about their finances, and 61% of Americans say they spend money to make themselves feel better.
It’s also best when making payments not to just pay the minimum amount because that is how interest accumulates.
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Ideally, one of the best things experts suggest is to budget your expenses and have a savings account, or an emergency fund, to help you quickly save you from debt.
To look at the full study and see how other states compared, click here.