lllustrating the Credit Card Debt Burden in All 50 States
Total private and public debts in the U.S. have hit an all-time high $70 trillion. One contributor, fueled by high interest rates and expanding services, is credit card debt. Per capita credit card balances top $3,000 in the U.S., with the most expensive states to live in impacted the most.
- Credit card interest rates have hit a 25-year high, with average rates at 17%
- Growing technological adoption has also contributed to push credit card debt per capita in the U.S. to $3,200
- Alaska, the District of Columbia and Hawaii lead the nation in credit card debt balances
- Mississippi, West Virginia and Kentucky are the states with the lowest credit card burdens
The data comes from the Federal Reserve’s New York branch, which puts out quarterly reports on household debt and credit for all 50 states. Our viz shows credit card debt balance per capita by state as of Q4 2018. A darker shade of blue indicates a higher debt load.
The Top 5 Credit Card Debt Balances by State (Compared to National Average)
1. Alaska: $4,350 (135.09%)
2. District Of Columbia: $4,180 (129.81%)
3. Hawaii: $4,060 (126.09%)
4. New Jersey: $4,040 (125.47%)
5. Maryland: $3,910 (121.43%)
The Lowest 5 Credit Card Debt Balances by State (Compared to National Average)
1. Mississippi: $2,110 (65.53%)
2. West Virginia: $2,240 (69.57%)
3. Kentucky: $2,330 (72.36%)
4. Arkansas: $2,410 (74.84%)
5. Alabama: $2,420 (75.16%)
Despite overall low interest rates, credit card rates have hit a 25-year high, with average interest rates at 17%. At the same time, total consumer debt in the exceeded $4 trillion for the first time, a figure which includes credit card debt.
Key players in the credit card industry have seen impressive gains with the rise in credit card debt. Card spending at JPMorgan rose 11% in the last quarter. Shares of Mastercard and Visa, the largest card processors, have risen 47% and 37%, respectively, in 2019, compared with an increase of about 20% for the S&P 500.
Credit card spending continues to rise with the ever-growing presence of online commerce, which increased by 15% in 2018 alone. Purchasing from anywhere on earth has never been easier, but paying for it is another story - 70% of U.S. consumers admit they wouldn’t be able to pay their credit card debt off in a year.
Debt loads vary across the U.S., with overall cost of living a large factor. The states with the highest credit card burdens, Alaska and Hawaii, are some of the most expensive states to live in, and Washington DC is one of the most expensive cities to live in.
What’s next in the credit card market? While ecommerce and mobile payments show no signs of slowing, a new competitive landscape may be forming: Apple has recently launched its own credit card, and cryptocurrency lender Nexo has recently launched a crypto credit card, complete with MasterCard branding.
How has credit debt affected people in your state? Are higher credit card rates leading you to use debit instead? Are you interested in the Apple Card? Let us know in the comments.
Data: Table 1.1