Map Shows States With Worst Credit Card Debt
As inflation remains high across sectors, many Americans are battling extreme credit card debt —and Newsweek spoke with experts about which parts of the country are being hit hardest.
However, your economic reality could differ significantly based on where you live. A new report from Moneywise revealed certain states saw significantly higher overall credit card debt.
The top five states for worst credit card debt were as follows: Mississippi, Georgia, Louisiana, Alabama and Texas.
Southern residents faced higher debt balances on average and also were more likely to have payments overdue by 30 or more days.
"It shouldn't be a surprise that the states that have residents with the highest average debt amounts also mostly suffer from also being those locations with the most late payments," Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
"Many of these states, particularly in the southeastern United States, encounter more issues with this because of lower incomes in their areas. With inflation still playing a large role in most everyday costs, many of these state residents have turned to credit cards and other financial debt products to ease the burden and are now struggling to make payments."
Mississippi saw 7.05 percent of its consumers over 30 days behind on credit card payments and had an average bankcard debt of $5,439, based on data from TransUnion's Credit Industry Snapshot.
Georgia saw a high rate of credit card debt at 6.32 percent of consumers 30 days or more behind on payments and an average debt of $6,817.
Louisiana, Alabama and Texas trailed behind, with between 5.49 and 6.09 percent of consumers 30 days or more behind on their credit card payments.
"The data clearly indicates that late credit card payments are a concern across multiple states, regardless of the average debt levels," a spokesperson from Moneywise said in a statement. "States like Mississippi and Georgia have a notably higher percentage of consumers falling behind on payments, suggesting significant economic stress among their residents."
While rising interest rates and inflation impacted all Americans, those living in the South often have lower incomes than their Northern and Western counterparts, which could impact the surge in missed payments.
"It's not surprising that many of the states with higher rates of late credit card payments are in the South, as this region includes some of the poorest states in the country," Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, told Newsweek.
"The South has a higher concentration of poverty and lower median incomes compared to other regions in the U.S. These lower income levels mean many people rely heavily on debt to cover everyday expenses and emergencies."
The political landscape in the South could also contribute to the debt levels due to a lessened emphasis on education, affordable housing and financial literacy, Thompson said.
"Access to quality credit is also limited in many lower-income communities, where people often resort to payday lenders or high-interest credit options, furthering their financial struggles," Thompson said.
Regions with limited access to financial education tend to struggle more with managing debt, said Michael Ryan, a finance expert and the founder of michaelryanmoney.com.
"It's not about a lack of intelligence, it's about having the necessary tools and knowledge," Ryan told Newsweek.
"This isn't just a Southern issue. It's a call to action for the whole nation. We must rethink our approach to personal finance education and support."
Those who find themselves with a heavy amount of credit card debt are advised to start working on making their payments immediately, as interest only increases over time.
"If you're in this situation, you have to look at where in your budget you can cut to start aggressively paying that debt down," Beene said. "You've already lost dollars to inflation. You don't want to lose additional ones to interest."
