BALTIMORE, MD—With Americans having increased their collective credit card debt by $52 billion last year, and the grand total at around $1.3 trillion, the personal-finance website WalletHub this week released its report on the States Where It Will Take the Longest to Pay Off Credit Card Debt. Alongside this report, WalletHub also released its Financial Insecurity Survey, which examined the connection between people’s financial self-image and their mental health.
WalletHub drew upon data from TransUnion, the Federal Reserve, the U.S. Census Bureau, and WalletHub’s proprietary credit card payoff calculator to determine the cost and time required to repay the median credit card balance in each of the 50 states and the District of Columbia.
Borrowers in Alaska take the longest to pay off their credit card debt – about 16 months, while folks in Washing DC come in second – taking around 15 months to pay off credit card debt. Maryland came in at No. 18 on the list, with an average payoff time of just over 12 months.
Credit Card Debt in Maryland (1st Rank = Longest Payoff Timeline):
- Overall Rank: 18th
- Median Credit-Card Balance ($3,101)
- Median Income ($73,492)
- Cost of Interest Until Payoff ($363)
- Expected Payoff Timeline (12 months and 22 days)
“Looking at the median credit card debt in a state can give you a good idea of whether people are struggling or doing well compared to people in other states, but it’s also important to look at how much residents put toward paying their debts off each month,” said WalletHub analyst Chip Lupo. “Low average payments lead to long payoff timelines, which in turn lead to high amounts of interest accrued. For example, Vermont’s median credit card debt is relatively low, but it ranks as the state with the third-biggest debt problem due to low average monthly payments.”
“Alaska is the state with the biggest credit card debt problem, with the median amount per person reaching $3,683,” Lupo added. “Given that the average person in Alaska pays $259 toward their credit card bill each month, it would take more than 16 months to pay off their entire debt, and they would pay $553 in interest.”
The full report can be viewed online here at WalletHub.
More in the video below.
Photo via Pixabay
