How Many People in Your State Are Burdened by Credit Card Debt

Debt. Nobody likes it, but we all have some amount of debt on our household ledger. 2020 was a strange year in terms of household finances — on the one hand, many Americans were suddenly out of a job; on the other hand, expenses on many items declined and the government sent help. Still, according to a report from the Federal Reserve, household debt hit $14.6 trillion — that’s trillion with a T — at the end of 2020, a rise of $414 billion. 

Much of that debt was driven by people taking advantage of low interest rates to refinance their homes or buy new houses far from crowded cities as remote work made commuting less of a necessity. Mortgage debt passed over $10 trillion for the first time ever, an increase of $486 billion during 2020. This is the top city Americans are moving to.

While student debt and auto debt also increased, albeit at much a more modest pace, consumers were apparently keeping a close check on their credit card accounts, even if their paychecks have shrunk. Credit card debt actually dropped by $108 billion to $820 billion, the Federal Reserve reports. Stimulus checks may have had a hand in bringing down credit card debt. 

To identify how many people in each state are burdened by credit card debt, 24/7 Wall St. reviewed data from Urban Institute’s “Credit Health During the COVID-19 Pandemic.” We ranked states by the credit card delinquency rate — the share of consumers with a credit or charge card who are 30 or more days delinquent — as of October 2020, the latest available. Additional data from the report includes each state’s median credit score, also for October 2020.

Nationwide, the credit card delinquency rate decreased to 4.06% in October 2020 from 5.92% in February 2020. Median credit scores were up in the meantime, from 693 in February 2020 to 704 nine months later. (These are the states with the most mortgage debt.)

Across all states, credit card delinquency rates — accounts 30-plus days in arrears — range from 2.65% to 6.73%. States with higher poverty rates and a higher share of people without medical insurance, the uninsured rate, tend to have higher credit card delinquency rates and lower credit scores.

Unfortunately, the pandemic may have forced more people into poverty. According to the Census Bureau, the U.S. poverty rate last year rose 1.0 percentage points to 11.4% from 10.5% in 2019. That reversed a five-year decline in the poverty rate. 

Not only poverty has increased in 2020, unemployment did too. The annual unemployment rate in 2020 was 8.1%, according to the Bureau of Labor Statistics, reaching a 14.8% peak in April 2020. The jobless rate has been on a downward trend since, declining to 4.6% this past October. As more people return to work, they’ll have more money in their pockets to spend — and perhaps further slash their debt burden.

Click here to see how many people in your state are burdened by credit card debt

To identify how many people in each state are burdened by credit card debt, 24/7 Wall St. reviewed data from the nonprofit think tank Urban Institute’s Credit Health During the COVID-19 Pandemic feature. We ranked states by the credit card delinquency rate — the share of consumers with a credit or charge card who are 30 or more days delinquent — as of October 2020, the latest available.

Each state’s median credit score — median Vantage score (300 to 850) of people with a credit bureau record — are also from the Urban Institute report and are for October 2020, the most recent available. The Urban Institute dataset contains information derived from de-identified, consumer-level records from a major credit bureau nationwide. 

Additional data on poverty rate and uninsured rate are annual estimates from the Census Bureau’s 2019 American Community Survey. Data on 2020 unemployment rate came from the Bureau of Labor Statistics.

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