Credit card debt increases by state.
Credit card debt increases by state.
Americans Carry Over $1.2 Trillion in Credit Card Debt
Americans now hold over $1.2 trillion in credit card debt, adjusted for inflation, according to a recent report by WalletHub, a technology-based personal finance platform. That figure includes $43 billion from the second quarter of 2023 alone.
But what makes this debt even more interesting is the variation among individuals and the states they reside in. Certain states have higher credit card debt burdens compared to others. This discrepancy may reflect the different ways individuals have been impacted by inflation and rising interest rates, as well as the varying levels of financial responsibility.
WalletHub compared 50 states based on the most current consumer finance data from the Federal Reserve, TransUnion Credit Bureau, and the Bureau of Labor Statistics (BLS). Here’s a breakdown of the ten states with the highest and lowest household credit card debt.
The Highest Household Debt States
California, the Leader of the Pack
At the top of the list is California, with an average household credit card debt of $9,796. The Golden State is known for its high cost of living and extravagant lifestyles, which contribute to its residents’ sizable credit card bills.
The Lone Star State and Sunshine State Not Far Behind
Texas and Florida come in at second and third place, with average household credit card debts of $9,216 and $9,053, respectively. These states are rich in economic activity and provide ample opportunities for spending.
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Other Heavy Hitters
Rounding out the top ten states with the highest household credit card debt are New York ($8,964), Illinois ($8,046), Pennsylvania ($7,517), Georgia ($8,976), Ohio ($6,862), New Jersey ($9,468), and North Carolina ($7,671).
The Lowest Household Debt States
Wyoming and Vermont Set the Standard
The states with the lowest overall household credit card debt are Wyoming and Vermont. Residents in these states have an average credit card debt of $7,667 and $7,162, respectively. These states demonstrate lower levels of consumer spending and potentially higher levels of financial responsibility.
The Dakotas and “The Last Frontier” Follow Closely
North Dakota and South Dakota come in at third and fourth place, with average credit card debts of $6,848 and $6,857, respectively. Alaska, also known as “The Last Frontier,” surprisingly finds itself in fifth place, with residents carrying an average credit card debt of $10,142.
The Rest of the Pack
Delaware ($8,252), Montana ($7,213), Rhode Island ($7,973), Maine ($6,827), New Hampshire ($8,171), and West Virginia ($6,836) complete the list of states with the lowest household credit card debt.
Average Credit Card Debt per Household Increases
During the second quarter of 2023, the average credit card debt per household rose 7.9% to $10,170 from $9,245 in the same period last year. Despite this increase, it is important to note that it is still $2,242 below the record set in the fourth quarter of 2007.
However, while the debt burden grows, it seems that not everyone can keep up with their payments. The credit card charge-off rate, which measures the percentage of defaulted credit card balances compared to the total amount of credit outstanding, increased by 11.92% during the second quarter of 2023, finishing at 3.38%.
At the end of the second quarter of 2023, consumers accumulated almost $43 billion in additional credit card debt, making it the second-largest increase ever witnessed during this time period.
With credit card debt on the rise and individuals in different states facing varying levels of economic challenges, it is crucial for everyone to take responsibility for their financial well-being. Planning, budgeting, and managing debt are essential components for individuals to stay on top of their finances.
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