September 6, 2018
Is your credit card balance increasing or decreasing? Data from the credit bureau Experian suggests that it's more likely to be rising. Credit card balances increased by an average of almost 6.6% year over year in the second quarter of 2018, adding $48 billion to America's collective credit card debt.
Debt rose in every state, although some states fared better than others.
Five states topped the list with debt increases over 8%, headed by Nevada at 9.34%. (Increased credit card usage in the home of legalized gambling? Not a surprise.) Nevada was joined in the top five by Florida (8.95%), Washington, DC (8.59%), South Carolina (8.50%) and Georgia (8.43%).
Three Northeastern states were among the five most frugal with their credit cards. Maine led the way with a miniscule 0.17% increase, while credit card debt only increased by 1.60% in Vermont and 3.89% in New Hampshire. The other two states in the frugal five are Arkansas (3.06%) and West Virginia (3.76%).
Experian data also suggests that you may have more credit cards to go along with that extra debt. Credit card accounts rose by an average of 15% over the same period.
South Dakota seems primed for a large increase in credit card balances next year, since they had the largest increase in card accounts by far at 23.62%. (The state also houses many credit card issuers.) North Carolina was the next highest at 20.03%, while Kentucky, Arizona, West Virginia, and Idaho all had card account increases over 19%.
Vermont stays on the frugal list with only a 3.35% increase in the number of credit card accounts. Credit card account numbers in four other states also increased below 10% – Alaska (5.34%), Hawaii (7.45%), Wyoming (8.10%), and North Dakota (9.64%).
The increase in credit card balances may be lower in parts of the Northeast, but is that really because people are being frugal, or because they already have such high debt that percentage increases are smaller?
A ValuePenguin study on average credit card debt by state shows that Maine, Vermont, and New Hampshire really are careful with balances – especially Maine, which has the 3rd lowest credit card debt at $5,803. Only South Carolina ($5,801) and Ohio ($5,446) have lower credit card balances.
To find the highest credit card balances, go west. The five states with the highest average credit card debt are Alaska ($13,048), Wyoming ($11,546), Utah ($11,222), California ($10,496), and Montana ($9,759). Three more Western states are in the top ten – Colorado ($9,108), Oregon ($8,619), and Idaho ($8,570).
Where are the other two states with high credit card balances? They're New Jersey ($9,454) and New York ($8,764), portions of the Northeast with higher costs of living.
Consumers in some high-debt states are at least trying to cut back. Alaska, Wyoming, Montana, and New York are all in the top ten of highest credit card balances and the bottom ten of increased number of credit card accounts over the last year. One way to get off the high-balance list is to have fewer credit cards to accumulate balances.
Are you also trying to get off the high credit card balance list? You can change course – but it won't be easy. Review your budget and adjust your spending so you have at least a small surplus to use in paying down debt. Prioritize your spending into needs and wants. If there are just too many wants, look for side gigs or other ways to increase your income.
Why not take action today and be a model for everyone else in your state to follow?
If you want to reduce your interest payments and lower your debt, join MoneyTips and use our free Debt Optimizer tool.
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