State residents have second-least amount of credit card debt
According to a new report, Mississippians have the second-least amount of credit card debt among the states and the District of Columbia.
The report comes from the financial website WalletHub, which uses credit data information from TransUnion to calculate the cost and time required to pay off the median card balances.
In Mississippi, the median credit card debt is $2,304, at a cost of $231 to pay off and it takes 11 months and eight days to pay off that debt.
The only state sitting better off than Mississippi is West Virginia, where the median credit card debt is $2,131, the cost of pay off is $211, and it takes 11 months and three days for payoff.
Iowans actually carry the lowest amount of credit card debt at $2,011 and the cost for payoff is $215, however in Iowa it takes longer, at 11 months and 21 days, to pay the credit card debt. Conversely, Alaska ranks first for the highest amount of credit card debt at $3,517, costing $540 to pay off and taking 17 months and 14 days to pay off.
As a nation, Americans owed $1.1 trillion in debt in 2022 thanks to those plastic credit cards. That’s an increase of $179.4 million.
In order to determine the states with the most and least sustainable credit-card debts, WalletHub first looked at the median credit-card balances and credit card payments of residents in each of 50 states and the District of Columbia as of April 2023, based on TransUnion data.
The analysis includes credit cards that carry a balance and excludes store cards.
Using the median credit-card balance and monthly credit card payment of residents in each state, WalletHub determined the required number of months to pay off that balance and the resulting finance charges. In order to do so, WalletHub made the following assumption:
Consumers would pay an average 20.92 percent interest rate, based on the APR paid by existing cardholders, according to the average interest rate assessed on accounts with finance charges. Using that percentage, WalletHub computed the cost of paying off the state’s median credit-card balance.
Finally, WalletHub ranked the states based on the calculator’s outputs. Rank 1 corresponds with the state with the least sustainable credit-card debt — that is, the state with the longest payoff timeline.
Data used to create this ranking were collected from the U.S. Census Bureau, Federal Reserve and TransUnion.
More details are found in the article posted on the WalletHub website.
