Americans are known for racking up credit-card debt, but just how much we have in total is shocking. At the beginning of 2021, Americans owed nearly $900 billion in credit-card debt. This is a bit less than we had in 2020, thanks to record paydowns due to the stimulus checks during COVID-19 pandemic. However, WalletHub projects that net credit card debt will increase by $60 billion in 2021.
Americans aren’t all in the same boat when it comes to credit-card debt, though. People in some states charge less than others, whether because they have been less impacted by the pandemic, are more responsible about their finances or a number of other factors. To determine which states have the least and most sustainable credit-card debts, WalletHub drew upon TransUnion credit data to calculate the cost and time required to pay off the median card balances of each of the 50 states and the District of Columbia.
Main Findings
States with the Highest & Lowest Credit-Card Debts
| Rank* | State | Median Credit-Card Debt | Cost to Pay off | Months & Days Until Payoff |
|---|---|---|---|---|
| 1 | Alaska | $2,839 | -$294 | 15 months and 8 days |
| 2 | Montana | $2,249 | -$224 | 14 months and 23 days |
| 3 | District of Columbia | $2,404 | -$235 | 14 months and 12 days |
| 4 | Colorado | $2,576 | -$251 | 14 months and 11 days |
| 5 | Vermont | $1,850 | -$179 | 14 months and 7 days |
| 6 | North Dakota | $2,001 | -$183 | 13 months and 13 days |
| 7 | Kansas | $2,186 | -$198 | 13 months and 10 days |
| 8 | Washington | $2,236 | -$199 | 13 months and 1 day |
| 9 | Oregon | $2,058 | -$179 | 12 months and 26 days |
| 10 | Nebraska | $2,022 | -$174 | 12 months and 19 days |
| 11 | New Hampshire | $2,111 | -$180 | 12 months and 17 days |
| 12 | Texas | $2,323 | -$198 | 12 months and 16 days |
| 13 | Idaho | $2,083 | -$177 | 12 months and 14 days |
| 14 | Virginia | $2,371 | -$200 | 12 months and 10 days |
| 15 | Maryland | $2,312 | -$194 | 12 months and 8 days |
| 16 | Georgia | $2,338 | -$196 | 12 months and 8 days |
| 17 | Wyoming | $2,073 | -$174 | 12 months and 7 days |
| 18 | Tennessee | $2,124 | -$177 | 12 months and 4 days |
| 19 | Nevada | $2,282 | -$189 | 12 months and 4 days |
| 20 | Indiana | $1,979 | -$160 | 11 months and 28 days |
| 21 | Massachusetts | $1,928 | -$156 | 11 months and 28 days |
| 22 | North Carolina | $2,096 | -$168 | 11 months and 25 days |
| 23 | New Mexico | $1,944 | -$156 | 11 months and 25 days |
| 24 | Minnesota | $2,016 | -$161 | 11 months and 22 days |
| 25 | Rhode Island | $1,982 | -$158 | 11 months and 21 days |
| 26 | Arizona | $2,117 | -$168 | 11 months and 20 days |
| 27 | Michigan | $1,915 | -$152 | 11 months and 20 days |
| 28 | South Carolina | $2,111 | -$167 | 11 months and 18 days |
| 29 | Utah | $2,000 | -$157 | 11 months and 15 days |
| 30 | Connecticut | $2,290 | -$180 | 11 months and 14 days |
| 31 | Missouri | $1,968 | -$154 | 11 months and 14 days |
| 32 | West Virginia | $1,981 | -$155 | 11 months and 13 days |
| 33 | Louisiana | $2,087 | -$163 | 11 months and 12 days |
| 34 | New Jersey | $2,226 | -$173 | 11 months and 10 days |
| 35 | California | $2,036 | -$158 | 11 months and 9 days |
| 36 | Maine | $1,691 | -$130 | 11 months and 6 days |
| 37 | Wisconsin | $1,683 | -$129 | 11 months and 6 days |
| 38 | Florida | $2,159 | -$166 | 11 months and 6 days |
| 39 | Arkansas | $1,846 | -$142 | 11 months and 5 days |
| 40 | Kentucky | $1,864 | -$143 | 11 months and 4 days |
| 41 | Delaware | $2,084 | -$159 | 11 months and 2 days |
| 42 | Illinois | $2,091 | -$159 | 11 months and 2 days |
| 43 | Oklahoma | $2,233 | -$170 | 11 months and 1 day |
| 44 | Ohio | $1,940 | -$144 | 10 months and 27 days |
| 45 | Iowa | $1,690 | -$124 | 10 months and 23 days |
| 46 | Pennsylvania | $1,871 | -$134 | 10 months and 12 days |
| 47 | New York | $1,854 | -$131 | 10 months and 8 days |
| 48 | Hawaii | $2,220 | -$156 | 10 months and 5 days |
| 49 | Alabama | $2,115 | -$129 | 8 months and 27 days |
| 50 | Mississippi | $1,912 | -$114 | 8 months and 19 days |
| 51 | South Dakota | $1,454 | -$048 | 4 months and 15 days |
*1 = Least Sustainable Credit-Card Debt
Ask the Experts
With Americans projected to add $60 billion in credit-card debt in 2021, we asked a panel of credit experts to shed light on the unsustainable credit behavior that leads to such negative results and their effects on the economy. Click on the experts’ profiles to read their bios and thoughts on the following key questions:
- What daily behaviors lead people to amass credit-card debt?
- What are the key situations when going into debt is worth it?
- What are three easy steps a person should take in order to become debt-free?
- As a result of the COVID-19 crisis, millions of Americans have experienced unexpected setbacks for their personal finances. What steps can a person take to be better prepared for unpredicted financial difficulties?
- What role, if any, should government play in incentivizing and encouraging people to maintain low debt-to-income ratios (e.g., through tax incentives)?
Ask the Experts
Ph.D., Editor, Global Journal of Management and Marketing; Professor of Management, School of Business – Southern Utah University
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Chair and Associate Professor of Finance and Economics – Nova Southeastern University in South Florida
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Ph.D., CFP® – Department Chairperson, Personal Financial Planning, College of Human Sciences – Texas Tech University
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Retired Professor of Finance – University of Louisville and author of “Your Total Wealth…. The Heart and Soul of Financial Literacy”
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DBA – Associate Professor of Business and Accounting; DECA Coach – Kansas Wesleyan University, Business3M Owner
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Associate Professor and Director of Financial Innovation Program, School of Business – Stevens Institute of Technology
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Methodology
In order to determine the states with the most and least sustainable credit-card debts, we first looked at the median credit-card balances and credit card payments of residents in each of 50 states and the District of Columbia as of September 2020, based on TransUnion data. Our analysis includes credit cards that carried a balance and excludes store cards.
Using the median credit-card balance and monthly credit card payment of residents in each state, we determined the required number of months to pay off that balance and the resulting finance charges. In order to do so, we made the following assumption:
- Consumers would pay an average 15.91 percent interest rate, based on the APR paid by existing cardholders, according to the average interest rate assessed on accounts with finance charges. Using that percentage, we computed the cost of paying off the state’s median credit-card balance.
Finally, we ranked the states based on the calculator’s outputs. Rank 1 corresponds with the state with the least sustainable credit-card debt — that is, the state with the longest payoff timeline.
Sources: Data used to create this ranking were collected from the U.S. Census Bureau, Federal Reserve and TransUnion.