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Average Credit Card Debt

In 2015, 73% of Americans had credit card debt, according the Federal Reserve Bank of New York. Credit card debt can sneak up on you. One month you’re on top of it, making regular payments, and the next you find yourself behind and unable to catch up. Sometimes it’s an unexpected emergency that puts you behind. Data shows that overall people in some states are better at staying on track with their credit card payments than in other states. We looked at average credit card debt levels in each state and how they’ve changed from 2006 to 2015.

Are you struggling to manage your credit card debt? Check out the best balance transfer credit cards.

Study Specifics

For this study we looked at median individual income data and credit card data. We found the rate of change for the average credit card debt-to-income ratio between 2006 and 2015 and between 2011 and 2015 for each state, plus Washington, D.C. Read the data and methodology section below to see where we got our data and how we put it together.

Key Findings

  • Americans were shredding credit card debt – From 2006 to 2015, average total credit card debt shrunk. Nationwide average credit card debt dropped 11.6% from 2006 to 2015, from an average of $3,170 per person to $2,800 per person. Overall in 48 states, total credit card debt dropped over that period. Only Virginia, Maryland and Washington, D.C. saw total credit card debt rise from 2006 to 2015.
  • Credit card debt is on the rise again – Average credit card debt has begun to rise again. From 2014 to 2015 the average American went from owing $2,730 in credit card debt to owing $2,800 in credit card debt. Nationwide data from 2016 seems to indicate the same. For example, total national credit card debt rose from $733 billion to $779 billion from 2015 to 2016, according to the Federal Reserve Bank of New York.
  • Average credit card debt peaked in 2008 – In 2008 the average American owed $3,670 in credit card debt. That means the average American had credit card debt equal to 14% of their annual income. This is also the year when Americans began cutting credit card debt with vigor. In 2015, the average American had credit card debt equal to 10.13% of their income.
  • The Great Recession may have spurred lower credit card debt levels – Between 2008 and 2014, the average credit card debt held by Americans dropped 25%. In some states, like Nevada, that decline was as high as 40%. The average Nevada resident went from holding $4,150 in credit card debt in 2008 to $2,650 in 2014. This partially coincides with the Great Recession of 2008-2009. With the job market suffering and incomes declining over that period, Americans may have been more hesitant to take on debt.

States Where Average Credit Card Debt Has Shrunk the Fastest

1. (tie) Michigan

Michigan and Ohio are tied for first place as the states where credit card debt has shrunk the fastest. Between 2006 to 2015, the average credit card debt-to-income ratio in Michigan dropped 32.9%. In 2006 the average Michigan resident had credit card debt equal to 13.4% of their income. That figure dropped to 11.5% in 2011 and finally 9% in 2015. This unwillingness to take on credit card debt may in part be due to concern for the economic future. After taking a hit due to the recession, median incomes in Michigan bounced back in 2013. If you are in Michigan and not part of the group with shrinking credit card debt, a balance transfer credit card may help you take control of your credit card debt.

1. (tie) Ohio

Between 2011 and 2015 Ohio saw the fastest decline in average credit card debt-to-income ratio in our study. In 2011 the average Ohio resident had credit card debt equal to 12.3% of their income. By 2015 that figure was only 9.3% – a drop of 24.5%. Ohio residents shared a similar fate to Michigan residents, incomes dropped during the recession but not as fast as credit card debt dropped. The average Ohio resident had credit card debt totaling $3,560 in 2008. By 2015 that figure was only $2,480.

3. West Virginia

West Virginia is the state where average credit card debt shrunk the third-fastest. The average credit card debt-to-income ratio dropped 33% between 2006 and 2015. That’s the fourth-fastest rate in the country. That trend did not slow down between 2011 and 2015 either. Over that period credit card debt as a percent of income dropped from 10.7% to 9.7%. That’s the eighth-largest drop in the country over that time period.

4. Colorado

The Centennial State comes in fourth. Colorado went from having one of the largest credit card debt-to-incomes ratios in the country to being middle of the pack. In 2006 the average Colorado resident had credit card debt equal to 14.3% of income. A figure which dropped to 12.3% in 2011 and to 10.3% in 2015.

5. North Carolina

Credit card debt is shrinking pretty fast in North Carolina. In 2006, the average North Carolinian owed $3,090 in credit card debt. That figure peaked in 2008 with the average credit card debt per capita sitting at $3,490. Since 2008, however, North Carolina residents have been smarter with their credit cards. Average credit card debt sat at $2,600 in 2015. Over this period average income in North Carolina was on the rise, helping to lower the credit card debt-to-income ratio. North Carolina was not immune to the Great Recession, of course, but from 2006 to 2015 median incomes rose 15%.

6. Wisconsin

Wisconsinites have always been some of the more conservative credit card users. In 2006 the average Wisconsinite had credit card debt equal to 11.3% of their income, the fourth-lowest rate in the country. By 2011 that figure had dropped to 10.2%. After 2011 is when credit card debt really started dropping for residents of America’s Dairyland. From 2011 to 2015 the credit card debt-to-income ratio in Wisconsin dropped by 17.5%.

7. Montana

In 2006, the average Montana resident owed about 14.5% of their income in credit card debt. By 2015, the average credit card debt-to-income ratio in Montana dropped 30%, from the aforementioned 14.5% to 10.2%. This puts Montana on par with North Carolina in terms of average credit card debt-to-income ratio in 2015.

8. Iowa

Unlike other states in the top 10, Iowa has seen its average credit card debt-to-income ratio fall at a fast rate largely because income has risen quickly. From 2006 to 2015 median incomes here rose 23%, from $23,321 to $28,871. Compare that to Michigan where, over the same period, incomes only rose 9.8%. Absolute credit card debt in Iowa also fell by about 15%, according to the Federal Reserve Bank of New York. Over that same time absolute credit card debt dropped by 26% in Michigan.

9. North Dakota

Credit card debt in North Dakota looks a bit like it does in Iowa. Total credit card debt in North Dakota has not dropped as much as other states. It dropped 15% from 2006 to 2015. Twenty-seven states had a faster drop in credit card debt over that time period. In comparison its average credit card debt-to-income ratio fell the fastest in the country. The average credit card debt-to-income ratio plummeted because North Dakota residents’ incomes rose quickly. Largely on the back of the oil boom, median incomes increased by almost 46% from 2006 to 2015. Because of that skyrocketing income, North Dakota residents went from owing 14% of their annual income in credit card debt, on average, to owing only 8.4% in 2015.

10. Utah

Utah is another state where total credit card debt has not changed much. From 2006 to 2015, Utah residents went from having an average of $2,840 per person in credit card debt to $2,640 in 2015. That’s a drop of about 7%. But while total credit card debt has not dropped too much, incomes rose. On average Utah residents received a raise of about 21% from 2006 to 2015, going from a median income of $22,404 to $27,136. The quickly rising income and the slowly shrinking credit card debt means that Utah residents had much lower credit card debt-to-income ratios in 2015.

Where Average Credit Card Debt Has Shrunk the Fastest

Data and Methodology

In our study on average credit card debt rates, we looked at data on average credit card debt and median incomes for all 50 states and Washington D.C. Specifically we looked at:

  • 2006 credit card debt-to-income ratio. This is average credit card debt per capita in each state as a percentage of annual median income in 2006. Data on credit card debt per resident comes from the Federal Reserve Bank of New York. Data on median individual incomes comes from the U.S. Census Bureau’s 2015 1-Year American Community Survey.
  • 2011 credit card debt-to-income ratio. This is the average credit card debt per capita in each state as a percentage of annual median income in 2011. Data on credit card debt per resident comes from the Federal Reserve Bank of New York. Data on median individual incomes comes from the U.S. Census Bureau’s 2011 1-Year American Community Survey.
  • 2015 credit card debt-to-income ratio. This is the average credit card debt per capita in each state as a percentage of the annual median income in 2015. Data on credit card debt per resident comes from the Federal Reserve Bank of New York. Data on median individual incomes comes from the U.S. Census Bureau’s 2011 1-Year American Community Survey.
  • Percent change in credit card debt-to-income ratio between 2006 and 2015. This is the percent change of credit card debt-to-income ratio in 2006 to credit card debt-to-income ratio in 2015.
  • Percent change in credit card debt-to-income ratio between 2011 and 2015. This is the percent change of credit card debt-to-income ratio in 2011 to credit card debt-to-income ratio in 2015.

We ranked each state across the two percent change in credit card debt-to-income ratios, giving equal weight to both metrics. We then averaged the ranks and applied a score based on those average rankings. The state with the best average ranking received a 100 and the state with the lowest average ranking received a 0.

Questions about our study? Contact press@smartasset.com. 

Photo credit: ©iStock.com/mixetto

 

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Derek Miller Derek Miller studied economics at the University of Edinburgh and currently lives in Brooklyn, New York. As the data journalist for SmartAsset, he conducts and writes data-driven studies on a broad range of personal finance topics.

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