If you had three guesses, do you think you could name any of the five states that have the highest amount of average credit card debt, per person? All five were in the top 10 last year, according to a ranking provided by Creditcards.com.
Want a clue? Coincidentally enough, all five rank among the bottom 10 states with the lowest median incomes.
If I gave you a geographical direction, that would likely help. So I’ll say that all five are in the South. Give up? Here they are:
The average Louisianan has $7,940 of credit card debt, and assuming an average and steady payment rate, it would take 15 months to wipe it out, according to the report.
The states with the lowest credit card debt burdens?
- Washington, D.C.
Based largely on higher median incomes in those states, residents would be able to pay off their credit card debts in about half the time as those living in the states ranked in the top five.
Interestingly enough, the credit card share of a consumer’s overall debt loan has fallen “fairly significantly” during the pandemic, according to a senior director at Moody’s Analytics. The data doesn’t indicate whether the drop in credit card debt is because consumers are making larger payments on their debts or if they are not using their card as much because they have less money to pay it off.
To calculate each state’s debt burden, the site analyzed the average amount of credit card debt in a given state, and, using the median income for that state, calculated how long it would take to pay off the credit card debt, assuming that 15% of the individual’s gross monthly income went toward repayment.