In this piece, we’ll take a look at the US states where residents manage their debt most effectively.
If there’s one thing that can be said for sure, it’s that credit cards play quite an important role in the American economy. Credit cards first surfaced in the mid 1900s, and now, there are billions of them inside consumer wallets worldwide. These cards and their data are crucial in 2024, particularly due to the widespread use of data analytics and data science to inform corporate and government decision making.
In terms of numbers, on average, an American holds three credit cards, which implies that there are close to one billion credit cards being used in the United States. While a billion cards might sound impressive, this figure also shows the impact of high interest rates and inflation on the US consumer. In 2017, a US resident held four active credit cards, and as of Q3 2023, the two most financially stable generations i.e. baby boomers and Generation X still held four credit cards per person on average. State wise, some American states use more credit cards than others. States where the average number of cards is higher than four are Illinois, Ohio, Pennsylvania, New York, Nevada, California, New Jersey, Texas, and Florida. New Jersey’s average of 4.5 makes it the state with the highest average number of credit cards in the United States.
Globally, we took a brief look at credit card usage statistics as part of our coverage of 20 Countries with Most Credit Card Debt in the World. This data shows that in 2020, there were 6.8 billion credit cards in the world, for a global average of more than one card per person. Additionally, statistics show that by Q2 2023 end, US credit card debt exceeded $1 trillion and set a new record. Some countries with the highest amount of credit card debt in the world are where median credit card debt per holder exceeds $2,500. Interestingly, the credit card debt of the country with the highest credit card debt in the world is more than double of the second country. For more details, you can read 5 Countries with Most Credit Card Debt in the World.
Shifting gears, credit card debt isn’t spread evenly across the US. For instance, among the 52 states that make up America, and interestingly, one state ranks among the top five most prosperous US states according to GDP per capita and the five US states with the highest credit card debt. We looked at both these metrics as part of our coverage of 15 States with the Best Economy Right Now and 25 States With the Highest Credit Card Debt in the US. This state is New Jersey, which is quite prosperous with a GDP per capita of $78,000 in 2022 and a credit card debt balance per capita of $4,750 as of Q4 2023. To see where New Jersey ranks on both lists, you should check them out.
So, New Jersey not only sees more people use more credit cards, but it’s prosperous and borrows more as well. For consumers in Jersey and the US, the tail end of May 2024 marks a shift. Following the Memorial Day weekend, US consumers are welcoming the summer season and gearing up to grow their purchases. These purchases come at a time when benchmark interest rates in America range between 5.25% to 5.50%, Middle Eastern conflict continues to threaten high gas prices, inflation is trending downwards to 3.4% in April compared to 3.5% in March, and consumer spending sits at 2.5% for Q1 2024.
Consumer spending will be quite important for the economy this year especially due to the higher interest rates and their drag on economic growth. Data from the Commerce Department shows that the economy grew by 1.6% in the first quarter of 2024. This was the slowest pace of growth since Q2 2022. The GDP growth figure marks a paradigm shift in US economic analysis, as it shows that as opposed to the lax monetary policy of the pandemic era, higher rates are now in the driving seat.
In short, even though inflation is falling, interest rates are high, and consumers are adapting to the higher prices that they’ve experienced since 2022. Within this context, here’s a list of the US states that are the best credit card debt managers.
Our Methodology
To make our list of the US states that best manage their credit card debt, we relied on data from the Federal Reserve Bank of New York’s Center of Microeconomic Data’s State Level Household Debt Statistics 2003-2023 for Q4 2023. From this data, we picked states (including D.C.) with the lowest percent of credit card debt balances that were delinquent for more than 90 days.
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20. Colorado
Percent of Credit Card Debt Balance 90+ Days Delinquent: 8.33%
Colorado is one of the most prosperous states in America if we consider its GDP per capita which stood at $74,167 in 2022. The state is a hub for the US government, and it houses key facilities for the Air Force, NOAA, and others. Colorado also has the second highest household debt per capita in the US. This stood at $90,760 as of Q4 2023.
19. Hawaii
Percent of Credit Card Debt Balance 90+ Days Delinquent: 8.31%
Hawaii is a non continental US state that is well known for some of the highest inflation rates in the country. Hawaii’s inflation is expected to sit at 2.8% in 2024, according to state government data. This will be higher than the US average of 2.6%.
18. Kansas
Percent of Credit Card Debt Balance 90+ Days Delinquent: 8.30%
Kansas is a Midwestern US state. Its median household income sat at $64,124 in 2021, which was low as it ranked in the bottom half of the data set. At the same time, Kansas’ household debt balance per capita is $44,280, placing it seventh from last in America including Puerto Rico.
17. Indiana
Percent of Credit Card Debt Balance 90+ Days Delinquent: 8.20%
Indiana is another Midwestern state. While it is among the top 20 most densely populated and populated US states, when it comes to debt, Indiana sits in the bottom half. The state’s household debt per capita is $46,870.
16. Alaska
Percent of Credit Card Debt Balance 90+ Days Delinquent: 8.12%
Alaska is the only US state that nearly touches the Russian border. Its geography means that the region benefits from vast natural resources. At the same time, Alaska’s median household income of $77,800 makes it one of the more well off American states.
15. New Hampshire
Percent of Credit Card Debt Balance 90+ Days Delinquent: 7.90%
New Hampshire is one of the smallest US states in terms of area. It sits on the Eastern end of the country, and the state had $64,640 in debt per capita. This means that not only does New Hampshire rank the 15th best US state in managing credit card debt, but it also makes it the state with the 17th highest household debt in America.
14. Nebraska
Percent of Credit Card Debt Balance 90+ Days Delinquent: 7.71%
Nebraska is a Midwestern state that is one of the least densely populated states in America. The state is one of the best known in the financial world since it houses Warren Buffett’s Berkshire Hathway. Nebraska also features vibrant transportation and alternative fuel industries.
13. Wyoming
Percent of Credit Card Debt Balance 90+ Days Delinquent: 7.65%
Wyoming shifts our list’s focus from the Midwest to the Western United States. It is the tenth largest state in the US in terms of area, and has a debt per capita of $53,400 – the 28th highest in the country.
12. Virginia
Percent of Credit Card Debt Balance 90+ Days Delinquent: 7.54%
Virginia is one of the most prosperous states in terms of GDP per capita. It has a GDP per capita of $68,211, which is the tenth highest in America. At the same time, Virginia ranks eighth in the US in debt. As of Q4 2023, its household debt per capita sat at $75,140.
11. South Dakota
Percent of Credit Card Debt Balance 90+ Days Delinquent: 7.53%
South Dakota is a landlocked state in central US which is one of the least densely populated states in the country. It also has one of the smallest economies in the country. South Dakota’s economy was worth $72 billion in 2023, making it the fifth smallest in the US excluding territories.
10. Vermont
Percent of Credit Card Debt Balance 90+ Days Delinquent: 7.45%
Vermont has the smallest economy in the US in 2023 price terms. Its economy is worth $43 billion, and total household debt per capita is $51,170. Vermont is also the second least populated state in America and the tenth lowest in 90 day credit card delinquencies.
9. Maine
Percent of Credit Card Debt Balance 90+ Days Delinquent: 7.43%
Maine is a state in the New England region of the US. It shares a border with Canada, and had a nominal GDP of $91 billion as of. 2023. Its economy relies on agriculture, and the state has also played a key role in US shipbuilding history.
8. Idaho
Percent of Credit Card Debt Balance 90+ Days Delinquent: 7.35%
Idaho is one of the largest states in America in terms of area. It ranks 15th in terms of the highest total household per capita in the US. Idaho had household debt of $65,480 as of Q4 2023. Idaho’s nominal GDP of $118 billion is one of the largest in the world. However, it is the 39th largest in America.
7. North Dakota
Percent of Credit Card Debt Balance 90+ Days Delinquent: 7.32%
North Dakota borders Canada and ranks just a spot above South Dakota in economic size due to its $74.1 billion nominal GDP. Compared to the rest of the US, a little known fact about North Dakota is that it houses the only state bank in the US. The state is also one of America’s largest grain producers.
6. Oregon
Percent of Credit Card Debt Balance 90+ Days Delinquent: 7.32%
Oregon has one of the highest GDP per capita in America. Its GDP per capita was $62,767 in 2022, making it rank 14th in the US. The Oregonian economy is powered by sizeable businesses such as Nike, Adidas, and healthcare. Additionally, the state also plays a key role in the US semiconductor supply chain due to Intel’s facilities.
5. Montana
Percent of Credit Card Debt Balance 90+ Days Delinquent: 7.24%
Montana is the fourth largest state in America in terms of area. However, its median household income of $56,539 in 2022 made it rank 40th in the country. Along with being the 5th best credit card debt managing state in the US, Montana’s $57,070 in total debt per capita is the 25th highest in the country.
4. Washington
Percent of Credit Card Debt Balance 90+ Days Delinquent: 6.99%
Washington ranks fifth in the US in terms of total household debt. Its balance was $82,130 as of Q4 2023. However, Washingtonians seem to be managing their debt well based on the state’s rank in this list. Washington’s $801 billion economy as of 2023 was also the ninth largest in America and is the largest on our list.
3. Minnesota
Percent of Credit Card Debt Balance 90+ Days Delinquent: 6.65%
Minnesota has one of the biggest economies in America. Its GDP was $471 billion in 2023, which was the 20th largest in the US. Minnesota is home to some of the largest companies in the US such as UnitedHealth, Target, and Best Buy.
2. Wisconsin
Percent of Credit Card Debt Balance 90+ Days Delinquent: 6.43%
Not only does Wisconsin have one of the lowest delinquent credit card balances in the US, but its total household debt per capita of $47,480 makes it rank 37th in the US. The Wisconsinite economy is known for its industrial and manufacturing equipment strengths.
1. Utah
Percent of Credit Card Debt Balance 90+ Days Delinquent: 6.37%
Utah is the best state in the US when it comes to managing credit card debt. This is despite the fact that the total Utahan household debt balance per capita was $82,240 in Q4 2023, which was the 7th highest across all US states. Its economy was worth $272 billion in nominal terms as of 2023. This made Utah the 29th biggest state in America in terms of its economy.
Utah’s economy is powered by tourism and mining, but a lack of a strong technology or financial base means that overall the economy’s size is small. At Insider Monkey, we delve into a variety of topics, ranging from the states with lowest credit card delinquencies to its impact on the economic performance; however, our expertise lies in identifying the top-performing stocks. Currently, Artificial Intelligence (AI) technology stands out as one of the most promising fields. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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