Given the recent economic downturn in the United States, financial advisers and ordinary citizens alike are working to navigate their lives with as little consumer debt as possible. A growing number of individuals are looking to Pennsylvania as an example, the state seeming to have been barely scratched by the financial blow that was given to the rest of the country.
Why? Pennsylvania shows a high rate of consumer responsibility, which contributes to its low amount of consumer debt. The area is also known for its efforts in agriculture and independent business, which brings money into the region. Home to several metropolitan areas, as well, the state has the grounds for industry and progress.
On the other hand, Pennsylvania’s reputation as a college state leaves its national student loan debt marginally higher than other states, and its rates of consumer fraud and identity theft are shockingly high for an area so responsible in finance.
Lower than Average Consumer Debt, Lower than Average Credit Scores
Overall, citizens of Pennsylvania have a lower consumer debt than the typical American. The state, in where there is a focus on fiscal responsibility, enables the easy payment of bills and the money-mindedness of consumers. In a recent analysis, the state has ranked eighth for credit health in its country. Let’s take a peek at some of the details:
- In 2012, it was calculated the average Pennsylvanian had a total consumer debt of about $39,100. This amount was nearly eighteen percent lower than that of the national average, which was $47,500.
- There also shows to be a certain responsibility when it comes to credit cards, as Pennsylvanians carry an average balance of $2,270. While the United States median is $2,280, a difference of $10 can really add up. The credit card debt is a dynamic statistic, the amount having decreased by over nineteen percent since 2008, when the average peaked at $3,350.
- Due to the state’s having been wreaked with foreclosures during the recession of 2008, the average home mortgage rate is almost $9,000 below the national average.
While these statistics make Pennsylvania appear as though it is a haven for those seeking to reduce their consumer debt, one should take the time to examine the numbers, full-circle. Although the state is, overall, more above-ground than most of its neighbors, there remains one red mark on its ledger:
- Student loan debt, which is increased due to Pennsylvania’s being a prime state for a college education, is nearly twenty percent more than the nation’s average. However, the number of people holding degrees is five percent more than the national median.
Again, Pennsylvania still remains better than most, even when given its largest financial fault. Oddly, though, its credit score is about six points below what is common in the United States. The main factor, according to financial analysts, is the state’s exponential amount of foreclosures that took place between 2003 and 2012. Though the state is on the mend, there might remain some time before its credit score is recovered entirely.
Laws and Policies Regarding Consumer Debt
It might seem shocking to find there is nothing secret nor special about Pennsylvania’s consumer debt legislations. To the disappointment of the individuals who have searched for the “recipe” to consumer debt reduction in the state, they are merely restatements of national policy.
There are two policies that make Pennsylvania unique. They are:
- The Pennsylvania Unfair Trade Practices and Consumer Protection Law, which:
- Prohibits the misrepresentation of goods,
- Prohibits knowing participation in scams,
- Prohibits omitting key facts about a product.
- The Statue of Limitations, which:
- Limits creditors to a time frame of six years in which they are able to contact those who owe their consumer debt.
- Limits the time in which consumer debts from either promissory notes or oral contracts to four years.
- While contact cannot be made after the specified windows of time, the debt is not, unless special circumstances apply, be cancelled. The debtor is still required to pay the fee, plus any outstanding interest.
A Danger to Low Consumer Debt in Pennsylvania
Pennsylvania, despite its having manageable consumer debt, ranks high for both consumer fraud and identity theft.
In 2010 alone, .3 percent of citizens had filed complaints of fraud, and .07 percent of residents had filed for identity theft. The numbers, at a fraction of a percent, might seem small; but they are enough to have given Pennsylvania the ranking of nineteenth for fraud and fourteenth for identity theft among the nation. The statistics for identity theft are particularly shocking: five years earlier, the state ranked twenty-fourth.
In addition, all of the cities in Pennsylvania ranked in the top fifty for both fraud and identity theft in 2010. Gettysburg, which ranked the highest and number twenty, reported 503 of 100,000 citizens (0.5%) had experienced some sort of consumer fraud.