New analysis highlights impact of record high credit card interest rates on debt burdens

WASHINGTON — Experts say many people are grappling with a trifecta of debt burdens. This includes higher outstanding balances, record-high interest rates, and more people in credit card debt overall.

A new nationwide CreditCards.com report ranks which states have the highest and lowest credit card debt balances. It shows Mississippi has the highest credit card debt burden and Massachusetts has the lowest.

Researchers factored in average monthly and annual income levels for each state. They also determined how long it may take to pay off debt if you spent about 5% of your monthly income for those expenses. In some states, it would take about a year to pay off debt, while in others, you may be paying back debt for almost two years.

Financial analysts say this is important to know because carrying credit card debt month-to-month is more expensive now than ever. That’s because interest rates are at an all-time high of more than 20% for some new cards.

According to the report, you may be paying hundreds, even thousands of dollars more because of additional interest fees.

“Your credit card rate is probably three, four or five times higher than you’re paying on a mortgage or car loan or student loan, said Ted Rossman, senior industry analyst at CreditCards.com. “So, it’s really important to come up with a good plan.”

Rossman recommends consolidating your debt onto a balance transfer card to help bring down these expenses.

“Cards, like the Wells Fargo Reflect, the Citi Simplicity and the Bank Americard have these offers where you where you move your existing high-cost debt and they’ll give you a 0% promotional rate for up to 21 months,” he said. “So, if you’re disciplined about paying that back, that could save you a ton of money in interest.”

If you don’t have a good credit score, experts say some nonprofit credit counseling agencies can help negotiate lower rates.

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