States with the worst credit card habits

Relying too much on credit cards to make ends meet is a bad habit to get into. Credit cards typically come with high interest rates and harsh penalties for late payment fees, meaning even small amounts of credit card debt can spiral out of control. Some states do a better job of staying on top of their credit card debt than others. Below SmartAsset looks at credit card usage data to find the states with the worst credit card habits.

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In order to find the states with the worst credit card habits we looked at data on credit card debt per capita, credit card debt as a percent of income, delinquency rate on credit card debt, late payment rate and credit utilization rate. Check out our data and methodology section below to see where we got our data and how we put it together.

Key Findings

  • Tardy South – Five of the states with the worst credit card habits are in the South. They are Florida, Georgia, Texas, North Carolina and South Carolina. A big reason these states rank so poorly is that residents tend to struggle with paying their credit card bills on time.

  • Alaska toeing the line – Alaska leads the nation in both credit card debt per capita and credit card debt as a percent of income, yet it ranked only 12th in this study. How did it escape the top 10? Outside of being reliant on their credit cards, residents of Alaska do a good job at paying them off in a timely fashion. For example, only 5.4% of credit card debt in Alaska is greater than 90 days delinquent, on top of that only 28.7% of payments are made late.

  • Midwest is best – Several states in the Midwest are the most responsible credit card users, according to our study. Nine of the bottom 10 states in the study (i.e. the states with best credit card habits) are in the Midwest, including Iowa, Wisconsin, Nebraska, North Dakota, South Dakota and Minnesota.

Data and Methodology

In order to find the states with the worst credit card habits, we looked at data on 47 different states and Washington, D.C. We did not have data for three states – Delaware, New Hampshire and New Jersey – so those states were excluded from our study. For the remaining states (plus D.C.) we looked at the following five metrics:

  • Credit card debt per capita. Data is from 2015 and comes from the Federal Reserve Bank of New York.

  • Credit card debt as a percent of median individual annual income. Data on credit card debt is from 2015 and is from the Federal Reserve Bank of New York. Data on incomes is from 2015 and comes from the U.S. Census Bureau's American Community Survey.

  • Credit card delinquency rate. This is the percent of all outstanding credit card debt which is at least 90 days delinquent. Data is for 2015 and comes from the Federal Reserve Bank of New York.

  • Late payment rate. This is the percent of credit card payments which are late. Data comes from the Experian's 2015 State of Credit Report.

  • Utilization rate. This is the percent of credit being used by the total amount of credit available. Data comes from Experian's 2015 State of Credit Report.

We ranked each state across each of the metrics, giving equal weight to all metrics. Then we found the average ranking for each state. We based our final score off of this average ranking. The state with the highest average ranking received a 100. The state with the lowest average ranking received a 0.

Questions about our study? Contact press@smartasset.com.

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