Credit cards are an important component in the US economy. Credit card debts form a significant percentage of total average unsecured debts in the US. Though the card issuers are yet to release detailed information on credit card ratings, the TransUnion quarterly report gives a comprehensive picture of the citizens in terms of debt repayment behavior. The credit information agency randomly and anonymously pulls and analyses data of resident on a quarterly basis from the nation’s consumer database. The findings not only gauges the card balances but also the amount of money at disposal to pay off the outstanding debt. A delinquent behavior has been observed whereby payment may be overdue by ninety days. The delinquency rate of some states has been high led by Alaska.
Top Ranked States
Recent statistics indicate that Alaskans are the most indebted people in the US. The residents carried the heaviest burden of credit card debts per capita of $4,270. The Alaskan residents lead in credit card debts due to their inability to settle outstanding debts as promptly as other states. On average it takes an Alaskan 20 months and a total of $992 in interest to clear their average card debt of almost $7,552. The high credit debts of the Alaskans is contributed by the economic situation in the state and seasonal jobs leading to high dependency on cards to make ends meet. Getting products to Alaska is expensive due to its remote geographical location. The cost is passed on to the consumer.
New Jersey is rated second in credit cards per capita. Statistics indicated that almost 70% of residents eligible for the credit card have already applied for at least one card. Though credit cards are an unsecured type of debt, institutions have issued out the amount in excess of $3,910 credit card debt per capita. The state is also rated sixth in terms of average credit card debts. Though an average income earner in New Jersey State earns more money than what is rated in the national average, the residents have more debts comparatively. The high cost of living leads to the increased rate of credit card debt per capita making it easy to have late payments which lead to increased interest and penalties. Though the state has gradually recovered from the 2008 great recession, soaring cost of mortgages, high property taxes, and the ever-rising cost of transport and energy leads to residents becoming credit card dependent.
Hawaii rates third in credit card debt per capita at $3,860. The tourism dependency state has seasonal jobs hence residents often use credit cards to get consumables as they await the high season. Agricultural income which comes in after harvesting is also another factor contributing to high credit card debts. Nevertheless, residents pay off their credit card bills at the right time. On average, 15% of income goes into servicing such debts. Hawaii is one of the states that have legislated laws to govern credit card. The state has banned surcharges on cards but the borrower has to pay the outstanding credit card debts in full. However, the law does not affect cash advance charges, late fees charges or insufficient funds fee.
National Average Credit Card Debt Per Capita
America's credit card debts have gone up gradually in the last couple of years. In 2017, there was a 7% increase from the previous year according to Nerdwallet. By 2017 there was an estimated $931 billion owed to different institutions in credit cards. At the household level, people aged between 45 and 54 years are the highest credit spenders. Over 74 years old residents and millennials are the lowest users of credit cards. Males hold more credit cards than females in the same age group. In terms of racial groups, the whites of non-Hispanic origin hold the highest number of credit cards followed by Asians and blacks. States with the lowest rates are Oklahoma, Indiana, Iowa, Tennessee and North Dakota.
US States With the Highest Credit Card Debt Per Capita
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