How Americans use their credit cards differently across the US – Finance

  • Credit card debt is at a record high in the US, with a difference in balance sheets and credit ratings by region.
  • Residents in the north-east and the Midwest usually have more credit cards and have higher credit scores.
  • Southerners, on the other hand, have lower scores and fewer cards.
  • That's how people use their credit cards differently in the US.

Earlier this year, credit card debt in the US reached a record level.

According to the study WalletHub, Americans owe more than 1 trillion dollars in credit card debt in January 2018, the first time in US history.

Overdue bets on credit cards fell sharply from their peak at 6.77% in 2009, but the data from the Federal Reserve Bank of St. Louis (FRED) shows that these figures have been slowly creeping up recently. FRED data also shows that interest rates on plastic have also been on the rise lately, increasing the cost of carrying the balance from month to month.


The Federal Reserve Bank of the United States in St. Louis, Missouri.
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The Federal Reserve Bank of the United States in St. Louis, Missouri.

(PhilipR / Shutterstock)

According to 2017 report from Experian, a typical American has 3.1 credit cards, credit card a balance of $ 6,354, and a credit rating of 675.

These figures, however, differ depending on the region of the country. Here's how credit The use of cards differs in the United States.

States with the lowest credit scores

The region stretching from South Carolina west to Texas and Oklahoma has the lowest average credit scores: from 647 (Mississippi) to 657 (South Carolina and Arkansas), according to 2017 Pilot ReportAs a rule, these states have a higher level of poverty than the national average. Census data,

In addition, the two southern states of Mississippi and Florida are the only ones in which secured credit cards are the most popular form of plastic, according to a consumer study NerdWallet,

Protected cards work in the same way as with debit cards, since the cardholder must "deposit" funds to the card, and not issue a credit line in advance. However, unlike debit cards, these cards report the payment of salaries by a large credit bureau and are therefore targeted at consumers with poor or small credit history,

The only not-southern states in the bottom ten in the score are West Virginia (658) and Nevada (655).


Nevada residents average credit rating is 655.
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Nevada residents average credit rating is 655.

(Obsolete images / Shutterstock)

Nevada can be a surprise, because, unlike regions with a higher degree of poverty, such as South and West Virginia, the Silver State not only has a poverty level that is almost identical to the United States as a whole (14.1% to 14% in the country), according to US Census Bureau,

Residents living in Nevada have an average of 3.18 credit cards and a credit card balance of $ 6,401, which is very close to the US average ($ 3.1 and $ 6.354, respectively) Experian). With so many midrange numbers, you might think that the average credit rating in Nevada will be similar to that of 675 nations nationwide. Instead, it occupies one of the lowest places in the country.

The reason for this can be difficult to fix. According to Scott Shuh, an associate professor of economics at the University of West Virginia, he may not be connected with geography.

The credit card habits, said Shuh Business Insider, are much more tied to income and wealth than to where you live: "From average income and above, the propensity to accept credit cards, the tendency to use credit cards and the propensity to take advantage of … all three of these things have a very strong connection with income and wealth. "

States with the highest average credit rating

On the other hand, the spectrum, Minnesota, Vermont, New Hampshire and South Dakota – is only four states with an average score of 700 or higher, Experian,

Again, this is consistent with what we expect from US Census Data – New England, along with parts of the Upper Midwest, is near the bottom when it comes to poverty.

Hawaii, which has second level of poverty, also enters into the first ten both on the average balance sheet, and on credit points, according to Experian,


Oahu, Hawaii.
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Oahu, Hawaii.

(MNStudio / Shutterstock)

Alaska a state of low poverty, but when it comes to credit card debt, it is the highest in Experian data at $ 8.515, more than $ 1000 above the second level in Connecticut.

Unlike other high-income countries, the average score for Alaska is below the national average. Again, Shukh said that he does not believe that there is an easy explanation.

Although wealth and income strongly correlate with the availability and use of credit cards, with a high credit bar and prevention of defaults, Shukh pointed out that your wealth does not predict whether you maintain a balance or not. "It does not have a strong correlation of income," Shukh said. "It's somehow puzzling why this is so."

Experian data confirm this. Both higher poverty level Texas and low poverty Hawaii has average debts approaching $ 7,000. On the other hand, low-poverty Wisconsin and high-poverty Mississippi maintain their balances below $ 5,500 (among the lowest in the country), Experian reported,

Shukh said that the most likely explanation is simple: impatience. Some people feel that they need something to have now, which can make them more likely to borrow money at high interest rates, he said. This impatience is clearly not correlated with income. "There are impatient people with high incomes and impatient people with low incomes," he said.

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