After the recession, New Mexicans are still struggling to keep their homes or recover from unemployment. A loss of health insurance may have left a mountain of medical debt.
In these times, people may use credit cards to make ends meet – possibly as their only means to buy food, medicine, car insurance, and other necessary purchases, or as the last resource to keep utilities on or make car payments.
When credit cards max out at outrageous interest rates, even if the minimum monthly payment can be made, the balance barely goes down because a huge part of each payment goes to interest. Then, when a payment has to be paid a day or two after the due date, the high late fee raises the balance again anyway.
New Mexican credit card debt
New Mexicans carry a crushing level of credit card debt with relatively low average incomes, reports CreditCards.com.
CreditCards.com looked at each state’s “credit card burden,” or “how quickly residents can erase the average card balance, using 15 percent of their earnings.”
To calculate a state’s average credit card debt, a formula is applied to determine how long it would take to pay off the average credit card debt if 15 percent of the average monthly income were paid monthly toward the credit card debt.
As it turns out, after Alaska, New Mexico’s 2016 credit card burden is the second worst:
•· New Mexicans have an average credit card balance of $5,615, the second highest in the nation, only behind Alaska.
•· New Mexican median income is $26,244, the second lowest.
•· New Mexican credit card burden: On average, it would take a New Mexican 20 months to pay off an average credit card debt if 15 percent of average median income ($328) were paid monthly, including $743 in interest.
CreditCards.com explains that while New Mexico’s average credit card balance is not that far off of the national average, the problem is that the state’s average income is so low. New Mexico also has the second-lowest rate of unemployment, says the article, citing the Bureau of Labor Statistics.
What to do
If you are struggling with credit card debt, talk to an attorney about possible remedies. You may be able to renegotiate a settlement with a credit card company or perhaps bankruptcy might be an answer. Your lawyer can advise you on the best course of action after considering your individual circumstances.