WASHINGTON — It's no secret living in D.C. is costly, but according to a new study, Washingtonians are racking up a lot of debt to cover those costs.
WalletHub recently ranked the states with the highest and lowest credit card debts, and found that D.C. came in second in the nation for high debt. The personal finance website released a report studying data from TransUnion, the Federal Reserve, the U.S. Census Bureau and WalletHub's propriety credit card payoff calculator to determine the cost and time required to pay the median credit card balance in each of the 50 states and the District of Columbia.
The report found that on average, people in D.C. have a median credit card balance of $3,290. The experts believe it would take 15 months and 7 days for individuals to payoff their debt.
A professor from Bristol Community College in Massachusetts offered a reason for why people start accumulating credit card debt.
"One of the leading causes of large amounts of credit card debt is overspending: buying unnecessary purchases that do not contribute to a person's well-being," Dorris Perryman said.
Overspending --even when you have the funds to do so--can worsen your position when an unpredicted financial difficulty hits.
"I know it is hard for many, but you must spend less than you earn so you can build a rainy-day fund that equals three to six months of expenses," John Pelletier, the Director for the Center for Financial Literacy said. "This should cover necessities like food, shelter, utilities, and transportation to work."
You can find more more credit card debt statistics and insights into the financial health of U.S. consumers here.