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Colorado credit card debt ranks high

4:00 PM, Nov 14, 2010   |    comments
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Credit scoring website - www.creditkarma.com - reports credit card debt is the highest in western states. The average debt in Colorado is said to be more than $1,000 higher than the national average.

With the holidays just around the corner, there's a fear the numbers are only going to get worse.

Local financial advisor and President of Peak Capital Investment Services David Peterson says, "They want you to carry a balance because that's how they make their money. You end up paying several times over for what you initially purchased."

Metro State Professor of Consumerism Darrin Duber-Smith says he believes the numbers aren't as much born out of impulse as they are out of desperation. Duber-Smith says he believes when the economy was booming, people used their homes as a revolving line of credit

"Since the housing crash, the value's a lot less, loans are almost impossible to get. I think people are now having to use their credit card. Then you have the government who says spend, spend, spend-we need to spend our way out of the crisis. So, I think consumers are getting mixed messages," Duber-Smith said.

Duber-Smith says other factors that could contribute to high credit card debt include a high student debt load and Colorado's cost of living going up without a comparable increase in wages. He also notes a high number of both unemployed and underemployed individuals.

Duber-Smith says Colorado has lost more than 30 corporate headquarters in the last 3 years.

"When you lose those companies, you lose a lot of jobs, and not just the companies themselves, but the supply chain, the services," he said.

Peterson says for people still employed, it comes down to buying what you need, not what you want.

"Shop for the best interest rate you can. I think the interest rate for people that have that over $9,000 in credit card debt [group], the interest rate is more important than the fee for the credit card," he said.

According to the report, the state with the highest credit card debt was Alaska, and third was Hawaii.

(KUSA-TV © 2010 Multimedia Holdings Corporation)

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