Americans are known for racking up credit-card debt, but just how much we have in total is shocking. At the beginning of 2020, Americans owed over $1 trillion in credit-card debt. Many consumers will be charging even more to their cards this year than usual due to the COVID-19 pandemic, and WalletHub projects that net credit card debt will increase by $80 billion in 2020.
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 are 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. Read on for the full findings, commentary from a panel of experts and a detailed description of our methodology.
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 | $3,897 | $466 | 17 months and 28 days |
| 2 | District of Columbia | $3,272 | $362 | 16 months and 16 days |
| 3 | Colorado | $2,968 | $297 | 14 months and 30 days |
| 4 | Vermont | $2,258 | $221 | 14 months and 18 days |
| 5 | Washington | $2,892 | $282 | 14 months and 15 days |
| 6 | Oregon | $2,696 | $262 | 14 months and 13 days |
| 7 | Kansas | $2,643 | $252 | 14 months and 4 days |
| 8 | Virginia | $3,023 | $287 | 14 months and 2 days |
| 9 | Idaho | $2,438 | $227 | 13 months and 28 days |
| 10 | Texas | $2,858 | $265 | 13 months and 26 days |
| 11 | Montana | $2,517 | $232 | 13 months and 22 days |
| 12 | North Dakota | $2,421 | $220 | 13 months and 14 days |
| 13 | New Mexico | $2,530 | $229 | 13 months and 13 days |
| 14 | South Dakota | $2,395 | $216 | 13 months and 12 days |
| 15 | New Hampshire | $2,634 | $237 | 13 months and 10 days |
| 16 | Minnesota | $2,552 | $227 | 13 months and 4 days |
| 17 | Maine | $2,310 | $205 | 13 months and 4 days |
| 18 | South Carolina | $2,639 | $233 | 13 months and 2 days |
| 19 | Georgia | $2,797 | $247 | 13 months and 1 day |
| 20 | North Carolina | $2,579 | $228 | 13 months and 1 day |
| 21 | California | $2,679 | $236 | 13 months |
| 22 | Massachusetts | $2,459 | $214 | 12 months and 30 days |
| 23 | Maryland | $2,837 | $247 | 12 months and 29 days |
| 24 | Arizona | $2,704 | $235 | 12 months and 29 days |
| 25 | Nevada | $2,666 | $231 | 12 months and 27 days |
| 26 | Michigan | $2,378 | $206 | 12 months and 26 days |
| 27 | Utah | $2,475 | $213 | 12 months and 24 days |
| 28 | Missouri | $2,441 | $210 | 12 months and 24 days |
| 29 | Connecticut | $2,814 | $242 | 12 months and 23 days |
| 30 | Wisconsin | $2,140 | $183 | 12 months and 22 days |
| 31 | Illinois | $2,642 | $226 | 12 months and 22 days |
| 32 | Florida | $2,654 | $225 | 12 months and 16 days |
| 33 | Oklahoma | $2,576 | $217 | 12 months and 14 days |
| 34 | Louisiana | $2,561 | $215 | 12 months and 13 days |
| 35 | Delaware | $2,586 | $214 | 12 months and 6 days |
| 36 | New York | $2,598 | $214 | 12 months and 5 days |
| 37 | Rhode Island | $2,444 | $201 | 12 months and 4 days |
| 38 | New Jersey | $2,666 | $219 | 12 months and 3 days |
| 39 | Nebraska | $2,296 | $189 | 12 months and 3 days |
| 40 | Ohio | $2,326 | $190 | 12 months |
| 41 | Indiana | $2,260 | $181 | 11 months and 28 days |
| 42 | Kentucky | $2,213 | $176 | 11 months and 25 days |
| 43 | Tennessee | $2,501 | $198 | 11 months and 22 days |
| 44 | Iowa | $2,034 | $161 | 11 months and 22 days |
| 45 | Arkansas | $2,353 | $186 | 11 months and 21 days |
| 46 | Hawaii | $2,951 | $232 | 11 months and 18 days |
| 47 | Pennsylvania | $2,335 | $180 | 11 months and 11 days |
| 48 | West Virginia | $2,130 | $163 | 11 months and 6 days |
| 49 | Wyoming | $2,536 | $185 | 10 months and 22 days |
| 50 | Alabama | $2,430 | $174 | 10 months and 15 days |
| 51 | Mississippi | $2,287 | $163 | 10 months and 14 days |
*1 = Least Sustainable Credit-Card Debt
Ask the Experts
With Americans projected to add $80 billion in credit-card debt in 2020, 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 the COVID-19 crisis wreaks havoc on Americans’ financial health, what steps can a person take to avoid drowning in debt and get some much-needed financial relief?
- 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
- Rosabeth M. Kanter
Ph.D. – Ernest L. Arbuckle Professor of Business Administration, Harvard Business School
Read More
- James R. Barth
Ph.D. – Lowder Eminent Scholar in Finance, Raymond J. Harbert College of Business, Auburn University
Read More
- Brett Rousseau
CPA – Assistant Professor of Accounting, School of Business, Maryville University
Read More
- John S. Jahera
Ph.D. – Bobby Lowder Professor, Department of Finance, Raymond J. Harbert College of Business, Auburn University
Read More
- John Hilston
Ed.D. – Professor of Economics, Eastern Florida State College
Read More
- Vicki J. Jobst
DBA, CPA, – Associate Professor, Goodwin College of Business, Benedictine University
Read More
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 2019, 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 15.78 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.
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