Americans Are Paying Off Credit Card Debt the Fastest in These States

In spite of record-high credit card debt of more than $1 trillion, many Americans are taking steps to reduce their debt. A recent GOBankingRates study showed that consumer debt decreased in 32 states plus the District of Columbia between the third and fourth quarters of 2023.

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While debt continues to rise in states with a high cost of living — such as Oregon, Massachusetts, Colorado and Massachusetts — overall credit card debt dropped by 2% across the U.S. in the last quarter of 2023, the study showed.

Some states fared better than others in their residents’ attempts to pay down high-interest credit card debt. In Kentucky, debt went from $5,917 to $5,090, a 14% drop, in the last quarter of the year. Mississippi residents also came out of the expensive holiday season slightly ahead of the game, paying off 12.40% of their debt, with the average balance dropping from $5,658 to $4,956.

These states also started with less than the national average of $6,993, but that didn’t seem to have a bearing on how much consumers in those states were able to pay off. Of the top 10 states where consumers paid off debt the fastest, seven started with more than the national average in debt.

Maryland and New York started with the second- and third-highest debt in the country, behind New Jersey. Yet, both states managed to reduce their average debt by 1.30%, compared to New Jersey residents, who racked up an additional 1.70% in credit card debt during the 2023 holiday season.

Looking at the top 11 states that paid off significant amounts of credit card debt (6% or more), geography and cost of living seem to be the common denominator. All but two states in the top 11 are located in the South or the Midwest, with the Northeastern states of Vermont and New Hampshire the exceptions.

Additionally, of the top 10 states paying down debt the fastest, five also made the top 10 of U.S. News & World Report’s list of states with the lowest cost of living. If you’re struggling with inflation and high costs and trying to pay down debt, you might consider relocating to Arkansas, Kentucky, Mississippi, Iowa or West Virginia.

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This article originally appeared on GOBankingRates.com: Americans Are Paying Off Credit Card Debt the Fastest in These States