Minnesota Credit Card Debt

On paper, Minnesota is looking pretty darn good. It is one of the main states to have survived the economic recession with hardly any financial casualties. Cities like Minneapolis, St. Paul and Rochester continue to flourish; companies like Target and Best Buy continue to profit; and industries such as forestry, manufacturing and agriculture continue to grow. While most states are suffering through the recession, loosing GPD due to a downturn in manufacturing, construction and tourism, MN appears to be above and beyond. However, Minnesotans know the truth. And, behind a thriving state are families struggling with credit card debt and in search of a debt consolidation solution.

The North Star state is the land of 10,000 lakes and boasts a blooming tourist and recreational industry. It is home to several large multi-national corporations including Target, United Health Group, 3M and Best Buy. In 2008 MN produced $236.2 billion in gross domestic product, an increase of 2% from 2007. In addition to these statistics, Minnesota had a per capita personal income of $42,772.00 in 2008 and median income of $55,578.00 in 2007. This is $5000.00 over the national average. These numbers put Minnesota in the 10th highest ranked state in per capita personal income and median income.

An Industry Flourishing in Debt

Behind the fine print are the facts. First and foremost, things are not peachy for every Minnesotan. While, on average, caucasion families appear to be doing well, 20% of Asians and Hispanics, more than 40% of African Americans and more than 40% of Native Americans females live below the poverty line. While residents in cities such as Roseville and Minneapolis tend to have higher salaries, residents in less populated suburbs do not. Those in Todd County, for example, have an average income of only $17,368.00 per household. And let's not forget about the state and local tax burden. In 2006 MN's taxes ranked the 4th highest in the country with 11.9%. Where there is a flourishing city, there are also millions of people drowning in debt.

Minnesotans currently have an average FICO score of 707 which is the second highest ranking in the nation after South Dakota. But what does this really mean? For one, it means Minnesotans have more opportunity to buy on credit. It means they can receive higher mortgages for bigger houses; it means they can receive larger credit card limits; it means that they can borrow a substantial amount of money and not worry about it until later. But what happens when this credit catches up with us? Minnesotans are the first to admit that credit card debt, among other debts, are stopping them in their tracks.

The Credit Card Crunch

Minnesotans are currently one of the highest ranked states in credit card debt with an average debt amount of $8332.56 and an APR of 15.38%. What this means for the average credit card holder is that, on top of the penalty fees and payments made to the credit card, each Minnesotan is also paying, on average, $1282.00 in interest rates per year.

Debt is a nightmare to live with. Just when you think you are in the clear, a monthly payment arrives. With the interest rates, the cash advance fees, the penalty fees, the late fees and the additional charges, it would seem like there is no chance of ever getting out of the red. And, to add to this living nightmare is the fact that most analysts are predicting that the worst is yet to come. Rising interest rates, harsher penalty fees and increasing annual charges can all be expected in the future. 60% of consumers do not pay off their credit card in full every month and 64% of all Americans site credit card balances as a major cause for worry in their household. However, it is not only the household that will suffer. 32% of consumers believe that loan defaults are one of the main concerns affecting the US economy as well.

Is Debt Consolidation the Answer?

One solution when it comes to dealing with credit card debt is to opt for debt consolidation. How debt consolidation works is it eliminates the excess of monthly bills and overdue fees as well as those persistent calls from debt collectors. Instead of having to pay several different bills each month, all your debts are consolidated into one payment. A debt consolidator will work with you as well as the collection agencies to stop those annoying phone calls, late fees and penalties. Furthermore, you will be put on a payment schedule that suits your current situation. More and more Minnesotans have lowered their monthly payments, reduced their interest fees and stopped paying for their over-spending mistakes. You can too. By consolidating your debt, you are getting the expert advice and personal solutions without the exhaustion, embarrassment and stress involved when handling the problem yourself.

However, this does not mean you can simply call a debt consolidator and forget it. The journey out of credit card debt starts with you. And, luckily, there are some quick and easy ways to start this journey today! After speaking to a credit councillor, opt to try these tips for next month and see how much you can save.

• Pack a Lunch- for the next month, instead of eating out, spend a little more on the weekly groceries and get up a few minutes early every morning to pack a lunch. Or, opt to make a little extra for dinner and save the leftovers for the next day. Not eating out every day can save you $10.00 a day, $50.00 a week and $200.00 this month!
• Host cocktail hour at home- many of us like to wind down after a long week with a few drinks after work or a Saturday evening out. However, when you add up the money spent on drinks, food and cab fare (after all, you won't be drinking and driving!), this can cost anywhere from $50.00 to $200.00 per night. This month, instead of hitting the bar scene, stay in with your friends. Put out some pre-cooked appetizers, buy your drink of choice and enjoy the company without the crowds (and the cheque).
• Make a Weekly Cash Spending Budget - physically knowing how much you can spend during the week (without touching that credit card) is a great way to avoid additional debt. Set a certain limit that you can spend. Include costs like fuel or transportation, groceries, any bills and a little extra for emergency spending cash. After you have calculated your allowance, hit the ATM and take out that amount in cash. If you have extra at the end of the week, then great! If not, well, at least you didn't dip into your credit card right?

The North Star state is one of the top ranked states to live in. Make the most out of your residency by getting out of credit card debt and enjoying the recreation, nature, entertainment and culture that makes Minnesota so incredible.