Recent data shows that Americans may be close to hitting their credit card limits and that many actually have. And sadly, new research reveals the worst state for credit scores is Mississippi.
A study was conducted by personal finance experts at MarketWatch Guides which is a reviews and recommendations team that is part of the New York City-based MarketWatch organization. This entity compiles data independently. They compared U.S. states on factors such as business bankruptcies, personal bankruptcies, vantage score, Fico score, total consumer debt, debt per capita, the average annual salary and credit cards per person.
“Revolving credit decreased at an annual rate of 1.2 percent in August 2024, according to the Federal Reserve. This is the largest decline since March 2021, when the country went into lockdowns,” the study notes. One must assume with this kind of big drop in credit card spending while debt figures are high, lower usage may be a signal that limits have been reached for many Americans.
The study revealed that Mississippi, Louisiana, and Alabama have the lowest average FICO and Vantage scores. Mississippi tops the list for both scores. “These low averages could be because these states suffer from lower average incomes, which may cause people to lean on credit cards and struggle with timely repayments,” the experts concluded.
However, I wonder if that’s the whole or true story?
I recently read an interesting editorial about a man who died fairly young, at just 42 years old due to suicide. He lived the glamorous Manhattan and Hamptons lifestyle that he was constantly flouting on social media after taking over his father’s real estate business.
It turns out he left behind life insurance worth about $15 million. However, his debts were close to $17 million. He was broke.
The editorialist drew from this man’s tragic life how different real wealth is from the mere “appearance” of wealth. The writer noted even people with high incomes can be in awful financial shape or on the brink of bankruptcy.
As in the case of the man who took his life, many people take to their social media posting photos and stories showing exotic trips, enjoying expensive purchases, and highlighting overall thrilling and exciting lives. Who knows why so many people do this. In the case of the man in the editorial, his widow was clueless about the couple’s true financial state.
We are all keenly aware that our nation itself, our government, is broke. The federal debt ceiling keeps climbing. But, it’s sad to know that so many people in this nation, and in our state, are running up debt as well. Sooner or later, the bills come due and the piper must be paid before there’s a default.
The only solution is discipline. However, that’s a character trait that our consumer culture tends to override too often.
We hope you enjoy this edition of Delta Business Journal.