In this piece, we’ll take a look at the best US state in managing credit card debt. If you want to know which states sit at the top in America when it comes to good credit, you can check out 20 US States Where Residents Manage 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 the best US state when it comes to managing credit card debt.
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.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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. Utah follows the trend of most states in our list of the Credit Card Champions: 20 US States Where Residents Manage Debt Most Effectively, which have smaller economies. 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 also wasn’t the largest economy on our list of the best US states according to credit card delinquency. To find out which state had the largest economy and was the second best in managing credit card debt, check out 20 US States Where Residents Manage Debt Most Effectively.
Utah’s economy is powered by tourism and mining, but a lack of a strong technology or financial base means that overall the economic 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 Micron but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Michael Burry Is Selling These Stocks and 20 Most Smoking Countries in Asia.
Disclosure: None. This article is originally published at Insider Monkey.
