AUSTIN, Texas–A new study reveals which U.S. states hold the most credit cards and highest/lowest balances relative to the average incomes residents in those states earn.
The study, conducted by Upgraded-Points.com, found residents of Iowa and Mississippi opened the fewest credit cards, with an average of 2.67 and 2.57, respectively.
Alaska has the highest average credit card balance by far at $8,515, the company said.
UpgradedPoints.com said it found an average 41.2% of Americans do not pay off their balances in full each month. "We analyzed how big of a balance the average person in each state carries on their credit card, as well as how much credit they use as a percentage of their annual income. The results were sometimes surprising — states that held the most credit card debt were not always the states we would have guessed," said Upgraded Points Founder Alex Miller.
The Findings
- Alaskans easily hold the highest average credit card balance at $8,515; the next closest is Connecticut at $7,258.
- States in the Midwest tend to have the lowest average credit card balances — though there are exceptions.
- States with the lowest credit card balances are Iowa and Wisconsin, with an average of $5,155and $5,363 respectively.
When UpgradedPoints looked into which states hold the highest credit card balances as a percentage of average income, the company noted the results were somewhat different:
- New Mexico residents had the most credit card debt as a percentage of income, coming in at 16.19%. The second-highest state was Georgia, with 15.43%.
- States that boast higher average incomes (New York, New Jersey, Connecticut and California for example) generally have residents who carry a lower amount of credit card debt relative to those incomes, the analysis found. Essentially, residents in those states use credit cards more, but individuals in those same states tend to be better positioned to pay those balances off in full each month.
- Americans in the Midwest tend to use credit cards responsibly, with numbers that place them in the bottom half of national credit card debt as a percent of their income. They use credit cards less, and if they do use them, they generally keep those balances at a manageable level.
- Washington, D.C., and Massachusetts have the overall lowest credit card debt as a percentage of income at 9.04% and 9.60% respectively.
‘Results Fairly Clear’
“The final results of the study were fairly clear: the average American has a high amount of credit card debt in relation to their income — around 9%,” the company said. “UP estimates that average Americans only have 8.3% of their monthly income (remaining) after all living expenses are paid…(Americans) are forced to either use their savings to pay off debt, or be in the unenviable position of carrying a balance.”
Additional information can be found here.