Alaska residents reach their credit limit

Inflation, rising interest rates, and soaring prices for groceries are wreaking havoc on families across the country, with total credit card debt has reached a record $930.6 billion and a study from WalletHub found that households are reaching their breaking point.

Closer to home, Alaska residents have the highest credit card debt balances in the nation, with an average $8,026 in credit card debt per resident, according to data from Experian.

March is National Credit Education Month, and with spring right around the corner, a good time to tackle those credit cards and debts.

“The impact is felt across the board, as gas, eggs, groceries, clothes, everyday necessities have increased, causing people to revert to credit,” says credit debt expert Mary Jo Terry.

“Credit card debt is the 2nd largest debt people have, and they carry those balances for a long time, with people often only paying the minimum balances, making it difficult to get out of debt.”

And Terry says that most forget that credit, especially bed credit from debt can affect nearly every aspect of life, from finding a home or apartment to getting a job.

“You have to ask yourself the hard questions-is getting that new TV or rifle is worth it.”

So in this time of inflation and increasing interest rates, what can people do to start paying down their credit card debt? Terry says there a few simple things to start tackling debt.

“First thing-create a monthly budget. This will help determine their discretionary spending, find areas to cut back.”

She also recommends keeping track of spending for 2 weeks to

“People might be surprised at what they see. Those mochas and fast food lunches can really add up. When people see it in black and white, it really clicks for some, seeing where they are spending. Identifying spending is key to getting it under control.”

Of course, there is an app for that. A few actually that can help track spending, credit card interest rates, and forgotten or accidental subscriptions.

“It’s OK to subscribe to say, Netflix, but maybe use the option that does have commercials to save yourself a little money. Every dollar counts when paying off debt.”

If identifying spending is key to controlling, how can people start paying down their debts? Terry says there are 2 methods-the avalanche and the snowball.

In the Avalanche, consumers prioritize the debts with the highest interest rates, paying the highest one first and making minimum payments on the rest. Once that is paid off, go to the next highest and repeat the pattern.

Likewise, the other method, the Snowball, would have consumers pay off their smallest debts first while paying the minimums on the rest.

“Once that first debt is paid off, it ‘snowballs’ into the other credit debts,” says Terry.

“It’s a lot of work, but it feels so good to pay off one card, then another.”

Another tool anyone can use-financial education.

“Take the time to learn and understand necessary expenses, what is and isn’t a priority, learn about credit. It is incredibly important to educate yourself. And you can start instilling financial literacy early on.”

People can find financial tools just about anywhere, from the internet to the library, even schools will offer financial tools, even if it isn’t necessarily offered as a class.

“Learn from the people around you. Ask questions. Have those conversations. Don’t procrastinate or avoid it. It may be difficult, be so worth it to take care of your credit.”