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Hawaii Credit & Debt Consolidation Information
Millions of Americans dream of Hawaii, especially during frigid winter months when thoughts turn to balmy breezes, spectacular surf and a laid-back subtropical lifestyle. Despite its allure, Hawaii far from paradise for many residents who struggle with relatively low wages and high debt.
Hawaiians spend 36.2% of their monthly paychecks on credit card, student loan, and housing payments, the highest percentage in the nation according to a 2018 survey. Hawaii is the most expensive state in the country and even though salaries are higher than in some other states, the high costs of living make it the nation’s least affordable place.
Location partly explains why Hawaii is so expensive. It’s an island chain with 1.4 million people far from the U.S. mainland, so the cost of transporting goods and materials there adds a premium to just about everything. But its enticing climate and natural beauty make its real estate very desirable and the prices show it. The average home in Hawaii costs more than $1 million and the average apartment rents for more than $3,000 a month.
Many Hawaiians struggle with debt as a result. In 2018, Hawaii ranked 13th among the states for credit card debt with the average resident owing a balance of $8,315.
Debt Relief Options for Hawaii Residents
If you live in Hawaii and run into debt repayment problems, consider contacting InCharge Debt Solutions for help. InCharge is a nonprofit debt counseling service that can create a debt management plan to consolidate your debts and reduce your monthly payments.
Rita Robyn was just one of many Hawaiians who leaned too heavily on credit cards to cover her expenses. A self-described “credit-card junkie”, Robyn lived in Honolulu and racked up credit card debt for decades as the amount of plastic in her wallet grew. By the time she was 62, she owed $74,000.
After decades of making minimum payments, which kept getting larger, she was starting to tap her 401(k) to make her card payments. Finally, she went online and found InCharge and a credit counselor who offered to create a payment plan.
InCharge managed to reduce her interest payments and save $625 a month on monthly payments. She was required to stop using credit cards, but five years later, she emerged debt free.
“I spent 30 years chasing that debt,” Robyn said, “and InCharge helped me pay it off in four years and 10 months. What a relief!”
Debt consolidation can help solve money problems and stave off bankruptcy. It reduces monthly payments through a program the InCharge manages.
InCharge is just one nonprofit debt counseling and management firms. If you are unable to pay your debts and are facing default, you should contact one immediately. The U.S. Bankruptcy Court has lists of approved debt management companies. You can also find out more by contacting local social services agencies.
Hawaii Debt Resources
If you enter a debt consolidation and management program, you still need to analyze your financial situation and adjust your spending.
Hawaiian programs are available to help, including:
- Workforce Development Division. Finding a higher paying job is one way to improve cash flow. The state Workforce Development Division helps jobseekers connect with employers, providing a free referral and placement service.
- This state-administered program uses state and federal financing to offer medical and mental health services to Hawaiians. The program, known as Med-QUEST, also offers also offers the Medicaid Fee-For-Service Program, which offers dental services
- The Institute for Human Services. This is a comprehensive social services agency that works to prevent homelessness and to help those who are homeless find shelter.
- The Supplemental Nutrition Assistance Program. The SNAP program, formerly called Food Stamps, provides low-income households with stipends to buy groceries. SNAP clients receive a debit card which is periodically refilled and can be used to buy approved food.
- Hawaii Financial Assistance. The Hawaii Department of Human Services administers this program which is an outgrowth of federal welfare reform in the 1990s. It provides needy families and those with or expecting children job preparation work and support services aimed at making the recipients self-sufficient. It also provides cash assistance to eligible applicants, who must be at least 19 years old. The program has work requirements. To learn more, contact Hawaii DHS.
Hawaii Debt Statistics
Although Hawaii has a very low unemployment rate – 2.7% in early 2019 – that good news can be deceptive. Tourism, a traditional low-paying job category, is a huge part of the state’s small economy. Hawaii’s average income from wages is slightly less than the national average, but its cost of living tops all 50 states. Monthly energy bills are more than double the nation’s second priciest state, California, with average topping $450.
That imbalance between income and expenses has created a debt problem that shows no sign of waning. The average Hawaiian had a $238 average monthly credit card bill, the second highest in the nation. Many in the state have a hard time managing that. A study of monthly debt to income ratios nationally put Hawaii’s at 36.15% in 2019, the highest in the nation. The report found that average incomes in Hawaii aren’t high enough to the average cost of living.
