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Americans started 2021 with nearly $ 900 billion in credit card debt. And that amount is expected to increase to $ 60 billion by the end of the year, according to WalletHub, a personal finance website.
To determine the states with the highest and lowest amounts of credit card debt, WalletHub looked at average credit card balances and payments made since September 2020, using data from the rating agency. from TransUnion Credit, the Federal Reserve and the US Census Bureau.
After compiling the typical monthly payments that Americans in all 50 states of the United States make for their debt, WalletHub estimated the time it would take for an individual to pay off their credit card balance, including finance charges, to the using the site’s credit card refund calculator.
Some states, such as Montana, Colorado, and New Hampshire, appear to be more prone to debt than others.
This could be due to “a combination of several factors,” WalletHub analyst Jill Gonzalez told CNBC Make It. “These factors include how financially literate residents are, how badly a state has been affected by the pandemic, and how high the cost of living is.”
Factors such as unemployment and medical emergencies have also affected debt levels over the past two years, Gonzalez says.
Find out the 10 states where individuals owe the most on their credit card balances, including an estimated time to pay off that debt:
10. New Hampshire
- Median credit card debt: $ 2,111
- Time until payment: 12 months and 17 days
9. Nebraska
- Median credit card debt: $ 2,022
- Time until payment: 12 months and 19 days
8. Oregon
- Median credit card debt: $ 2,058
- Time until payment: 12 months and 26 days
7. Washington
- Median credit card debt: $ 2,236
- Time until payment: 13 months and 1 day
6. Kansas
- Median credit card debt: $ 2,186
- Time until payment: 13 months and 10 days
5. North Dakota
- Median credit card debt: $ 2,001
- Time until payment: 13 months and 13 days
4. Vermont
- Median credit card debt: $ 1,850
- Time until payment: 14 months and 7 days
3. Colorado
- Median credit card debt: $ 2,576
- Time until payment: 14 months and 11 days
2. Montana
- Median credit card debt $ 2,249
- Time until payment: 14 months and 23 days
1. Alaska
- Median credit card debt: $ 2,839
- Time until payment: 15 months and 8 days
If you want to pay off your credit card debt, there are two common strategies to follow: the avalanche method and the snowball method.
With the Avalanche Method, you pay off as much as possible on the debt with the highest interest rate while making minimum payments on your other credit cards. “This method will help you pay less interest over time and could reduce the time it takes to get out of debt,” says Gonzalez.
However, this method requires a lot of discipline and commitment in order to streamline all of your extra money into one area of debt, Gonzalez explains.
With the snowball method, you pay off the smallest amount of debt first, regardless of the interest rate, then move on to the second smallest, and so on. “While this method can prove to be more expensive, it’s what you want to use when you need to motivate yourself with faster results,” says Gonzalez.
While the snowball method may be easier to implement, it may also take longer to get out of debt, says Gonzalez.
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