Arkansans are second best in the United States at managing their credit card bills, student loan debt and housing costs, according to a study by Credible.com. The financial marketplace provides side-by-side comparisons of lenders, allowing consumers to choose the best one.
With data from more than 540,000 borrowers, Credible calculated each state’s monthly debt-to-income ratio based on credit card debt, student loan debt and housing costs, such as rent or mortgage payments. The highest scores were given to states in which monthly payments were the lowest percentage of monthly income. Arkansans spend 25.62% of their income on debt, and the state received a 96.77 overall score, the second highest. Michigan residents spend 25.27% of their income on debt, and the state received a 100. Hawaiians spend 36.15% of their income on debt, and the state received the lowest score, a zero.
The U.S. average monthly credit card, student loan and housing payments are $207, $370 and $906, respectively. In Arkansas, the average monthly credit card, student loan and housing payments are $174, $319, and $666, respectively, according to Credible. Average annual income in Arkansas is $54,284.
The state has lower credit card debt, cost of living and expenses, compared to other states, but the study might not have considered the large number of Arkansans who don’t have bank accounts and look to other avenues to pay expenses, such as payday loans, said economist Mervin Jebaraj, director for the Center for Business and Economic Research at the University of Arkansas.
Student loan debt has been driving the growth in debt as a lot of millennials have the debt, he said. While the level of student loan debt has yet to reach crisis levels, it’s impacting the economy. The number of millennials is about the same as the boomers.