Editor’s Note: This story originally appeared on SmartAsset.com.
Credit cards can be useful, especially if you use them responsibly to earn points, airline miles, and other benefits.
With that said, it’s easy to let your credit card debt get out of hand and find yourself in serious trouble. For the second quarter of 2021, Experian reports that the average card balance was $ 5,525 nationwide, which is actually down from three years ago when it rose. at $ 6,505.
With that in mind, SmartAsset has ranked the states where debt is becoming more manageable for consumers. For more details on how we found and analyzed our data, read the Data and Methodology section at the end.
1. Rhode Island
Rhode Island is conducting this three-year and one-year credit card debt reduction study, down 11.88% and 8.81% respectively. That said, it still sits in the middle of the pack in terms of average debt, ranking 26th at $ 5,324.
Average credit card debt in Wisconsin is just $ 4,587, the lowest in the country. This is 7.15% of median income, the ninth lowest percentage seen in this study. Debt has fallen 6.55% over the past three years, placing the state 24th out of 51 for this measure.
Indiana has the fourth lowest average debt in the country, just $ 4,796. This is down 8.06% from the 2020 average of $ 5,216, the fourth largest year-over-year difference seen in this study. The three-year change is a decrease of 7.31%, ranking 22nd.
Ohio saw average credit card debt drop 9.57 percent from 2018 to 2021, the seventh-largest three-year drop recorded in this study. The average debt for Q2 2021 is $ 5,494. That’s 8.47% of median income, ranking Ohio 30th by that measure.
Michigan has the seventh lowest median debt in the second quarter of 2021, at $ 4,850. This is a decrease of 8.66% over three years and 6.98% over one year, ranking 15th and 19th respectively.
6. New Mexico
New Mexico ranks 34th for average credit card debt in the second quarter of 2021 ($ 5,203). It has the fourth biggest change in three years with a decrease of 10.35% from 2018. And also the second biggest change in a year, with a decrease of 8.75% from 2020.
7. New Hampshire
The median second quarter 2021 credit card debt in New Hampshire is $ 5,496, ranking 31st on this measure. That said, it makes up 7.05% of the state’s median income, placing the Granite State sixth lowest by this measure. It is also a decrease of 9.82% from 2018, ranking fifth.
Maryland actually ranks near the bottom in this study for credit card debt in the second quarter of 2021, finishing 46th at $ 6,164. That debt, however, is only 7.11% of median income, the seventh lowest in the study. Maryland finished 13th on both indicators measuring change, with debt down 8.96% over three years and 7.09% over one year.
Delaware saw average credit card debt drop from $ 6,176 in 2018 to $ 5,581 in the second quarter of 2021, the sixth largest drop (9.64%) in this study. The 2021 debt average represents 7.95% of the state’s median income, ranking 19th.
Kentucky’s average second quarter 2021 credit card debt is $ 4,772, the third lowest in the country. This is a decrease of 7.47% from 2020, which is the seventh largest year-over-year decrease seen in this study. The figure represents 9.13% of the median income in Kentucky, ranking 36th.
Data and methodology
To find the states where credit card debt is becoming more manageable, we compared the 50 states plus Washington, DC, based on the following metrics:
- Average credit card debt 2021. Data is for the second quarter of 2021 and comes from Experian.
- 2021 average credit card debt as a percentage of median income. The debt figure is from Experian and the revenue figure is from the one-year 2019 American Community Survey.
- Three-year change in average credit card debt. The data comes from Experian and relates to 2018 and 2021.
- One-year change in average credit card debt. The data comes from Experian and relates to 2020 and 2021.
First, we categorized each state into each metric. We then found the average rank for each state, weighting each metric equally. We ranked the states based on this average ranking, giving an index score of 100 at the top state and an index score of 0 at the lowest state.
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