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After the holidays, time to manage credit card debt

Americans used millions of credit cards to purchase an even greater number of gifts throughout the holiday shopping season. Thanks to a strong spending push right before Christmas, many retailers are seeing better-than-expected holiday profits.

But as wish lists get shorter, consumer credit card debts will get larger, especially with the sudden jump in sales.

The debt accumulated with holiday purchases will pile on top of the already large debt balance for consumer credit cards. Outstanding credit card debt is at its highest point since the end of 2008, and consumers accumulated $21.9 billion in debt during the third quarter of 2016, the largest third-quarter increase since 2007, according to a recent study by WalletHub.

“It is not a question of whether consumers are weakening financially, but rather how long this trend toward pre-recession habits will last and just how bad it will get,” Alina Comoreanu, a research analyst at WalletHub, wrote in the report.

However, West Virginians aren’t adding as much flame to the fire as other states. A study pegs West Virginia as having the fifth-lowest average credit card balance in the country at $4,718.31.

According to John Jackson, executive director of the Consumer Credit Counseling Service of the Mid-Ohio Valley, West Virginia is more tempered than other states when it comes to credit card spending, particularly around the holidays. Retail shopping sprees aren’t as prominent in the Mountain State as they would be in New York or California, and it has good credit card programs which helps customers spend smartly, Jackson said.

“We don’t have really large credit balances,” he said. “I think the region is pretty conservative with [spending].”

Although the relatively low credit card balance is a positive for the state, the factors surrounding the statistic are sobering but unsurprising. West Virginia has the nation’s sixth-lowest median income, according to the study, which makes paying off that low balance harder. Overall, West Virginia ranks 30th in the study in terms of credit card debt burden, taking about 16 months to pay off its average balance.

West Virginia’s combination of low balance and low income is also seen in Mississippi, Kentucky and Arkansas. However, the study overall saw a wide discrepancy between states in terms of how quickly the average balance can be paid off. Alaska had the heaviest burden, taking 20 months and $992 in interest to pay off its average balance, and North Dakota had the lightest burden, taking 12 months and $370 in interest to pay off its average balance.

“It’s interesting to see how much of a disparity there is between them,” said Matt Schulz, a senior analyst for “We kind of saw it’s a little bit all over the map in the study, but a lot of those middle states [in the rankings] like West Virginia and Mississippi have the closest correlation in terms of credit.”

That correlation doesn’t continue when it comes to unemployment rate. West Virginia’s unemployment rate is 6 percent, fourth-highest among all states, according to the Bureau of Labor Statistics’ November 2016 data. That’s the best shape its unemployment rate has been for years, but it still lags behind most of the country.

Although the study did not directly factor in the unemployment rate, Schulz acknowledged it’s still a vital statistic when studying and understanding credit card debt.

“Unemployment wreaks such havoc, that’s one of those things that can really drive a credit card balance up, because people don’t have any other choice,” Schulz said.

Jackson said the unemployment rate in the state, much of it caused by the decline of the coal industry and the slowdown of the natural gas boom, doesn’t just hurt the state’s relatively low consumer credit card debt. It also makes it more difficult to pay off medical debts and student loan debts. And West Virginia has the second-highest default rate in the U.S. for student loans, according to U.S. Department of Education data.

That leads to a trickle-down effect, according to Jackson.

“We have a student loan crisis because we don’t manage savings for education anymore,” he said. “People aren’t putting aside savings for that, so the fact that we don’t have savings leaves us turning to credit, and now we have credit card debt on top of student loan debt and medical debt.”

Although mounting student loans and medical bills are never easy to pay off, Schulz said the best solution for taking care of debt is the simplest — customers should pay enough every month so they at least chip away at the balance instead of seeing it climb with interest.

“It’s important to just do something,” he said. “Don’t bury your head in the sand.”

Jackson advised customers to be organized with their transactions and lay out a plan to get out of the debt. Paying beyond the minimum is also important, he added.

“That’s what gets a lot of people in trouble,” he said. “They start budgeting for that minimum payment, and before they know it, it takes 10 years to pay off.”

Reach Max Garland at, 304-348-4886 or follow @MaxGarlandTypes on Twitter.

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