Americans really know how to accumulate credit card debt: The U.S. total surpassed $1 trillion at the start of 2022. But there are some states with a more manageable amount of debt.
With this number and monthly credit card payments of those in each state, WalletHub figured out the amount of time it would take to pay off the debt and the charges from these payments. To do this, they assumed consumers paid about a 16.17% interest rate, in accordance with the average interest rate on accounts with financial charges.
WalletHub ranked the states and District of Columbia in order from most to least credit card debt based on payoff time. Payoff cost is shown as a negative number because it shows how much money needs to be spent on interest to pay the debt.
These are the seven states with the least credit card debt.
3. West Virginia
Mississippi has the lowest median credit card debt, which is half of Alaska’s $3,206, the highest median credit card debt. Payoff time in the state is twice as fast as intheDistrict of Columbia, which has a median credit card debt of $2,788 and a payoff time of 17 months and 3 days.
A lot of places with low credit card debt also have the low median earnings for full time workers, sothere does not appear to be correlation between high salary and low debt. But there does seem to be a correlation between low debt and low cost of living.
Mississippi has the lowest living wage threshold in America, at $51,754, meaning the amount your household needs to make to cover your daily expenses and save for retirement. This is significantly lower than Alaska, the state with the highest credit card debt, which has aliving wage threshold of $85,083.