Region is No. 8 in nation in credit- card debt

By Kristen Russo

krusso@vindy.com

YOUNGSTOWN

When it comes to percentage of income owed on credit cards, consumers in Youngstown are among the top 10 in the nation.

The credit-reporting agency Equifax released a study of the top 50 metropolitan statistical areas with the highest percentage of income owed to credit-card companies.

The regional area that covers Youngstown, Warren, Boardman and Sharon, Pa., came in at No. 8.

With a median yearly income of $39,304, consumers in this area owe a combined total of about $1.4 billion in credit-card debt, or an average of $6,142 per household. That’s 15.63 percent of income.

“The key to being debt- free is not using credit cards anymore,” said Victor Russell, regional operations manager at the Warren office of the Consumer Credit Counseling Service. “When you have to service that kind of debt, that reduces the amount you can use for other expenses.”

Russell said debt-to- income ratio should not exceed 15 percent. But debt-to-income ratio doesn’t cover just credit-card debt; it covers all loan debt excluding mortgage.

If a mortgage takes up 30 percent of total income, and a person has a 15 percent debt-to-income ratio, that equals 45 percent of income going toward debt payments, Russell said.

“That leaves you with 55 percent of your income to pay for utilities, which keep going up, and clothing and food prices this year are expected to skyrocket,” Russell said. “So that’s why when you’ve got a 15 percent debt-to-income ratio, it’s alarming.”

Russell said with the recession and the number of unemployed and underemployed people in the area, more households have used credit to purchase necessary items that, in the past, they would have purchased with cash.

The Canton-Massillon area and Toledo area also made the top 10, at No. 2 and No. 3, respectively. Equifax found that consumers in the Canton-Massillon region owed 17.23 percent of income to credit-card companies, while consumers in the Toledo area owed 16.72 percent.

The Cleveland-Elyria-Mentor region broke the top 20, coming in at No. 17 with 14.26 percent of income owed.

Overall, Ohioans owe about $29 billion in credit- card debt, making the state No. 3 in terms of highest credit-card balances nationwide.

Russell had two tips for those looking to cut debt.

First, sit down and analyze your income and expenses. See what can be cut from those expenses to bring them more in line with your income.

Second, call a certified credit counselor and work out a plan to be debt-free if cutting expenses isn’t enough.