Home » MBJ FEATURE » ‘Grinch effect’ casts pall over shopping season

‘Grinch effect’ casts pall over shopping season

By JACK WEATHERLY

Two credit-card reports cast a pall over the nation during the height of the Christmas-shopping season.

The timing of the analyses might be called the Grinch effect.

Mississippi has the sixth-highest credit-card debt burden in the nation, according to CreditCards.com.

Another personal-finance website, WalletHub, took a look at credit-card debt in more than 2,500 cities for the third quarter.

The nation “began the year owing more than $1 trillion in credit card debt for the first time ever,” WalletHub said.

And 2018 will end 2018 with $70 billion more in such debt, WalletHub projects.

Oxford residents like their credit cards more than other towns in Mississippi.

The home of the Ole Miss Rebels ranks in the 79th percentile, 23 percentile points behind the next-highest city in the state, Hattiesburg, WallethHub reported.

Perhaps not surprisingly, Madison ranks in the first percentile. It is tied with Southaven and Laurel and many cities outside the state, according to WalletHub.

Somewhat surprising, however, is the fact that two cities in the cash-poor Delta fared well.

Greenville is ranked in the second percentile and Greenwood is in the fifth.

“That could mean that there is indeed less credit card use in the area,” WalletHub analyst Jill Gonzalez said in an email.

“Considering that the cost to pay off debt in both cities is very low . . .Greenwood and Greenville have some of the most sustainable amounts of credit card debt, even with lower median income levels,” Gonzalez said.

“Madison has a much larger amount of debt… but still manages to be sustainable because it is a wealthier area,” she said.

CreditCards.com, whose report took a wider look at the debt burden by state – measuring debt against household income.

Mississippi has the ninth lowest median household debt, but the second-lowest median income. Thus, CreditCard.com computes its poor ranking in its burden.

That means if the recommended monthly payoff of 15 percent of the balance is carried out, it would take 16 months to pay off and cost $1,124 in interest, CreditCard.com says.

Because of rising debt, inflation is more likely and thus the Federal Reserve is 70 percent likely to raise key rates – thus adding to interest on cards and other debt — at its Dec. 19 meeting, according to WalletHub.

A silver lining in the gloom are balance-transfer cards.

“If used correctly – and that means strictly for paying off debt, not making additional purchases – a balance transfer card can save consumers hundreds or thousands of dollars,” according to CreditCards.com industry analyst Ted Rossman.

Much more information can be obtained at: https://www.creditcards.com/balance-transfer/#state-debt-burdens

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About Jack Weatherly

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