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Analyzing Each State’s Reliance on Credit Cards [2024 Survey]

Alex Miller's image
Alex Miller
Alex Miller's image

Alex Miller

Founder & CEO

Countries Visited: 34U.S. States Visited: 29

Founder and CEO of Upgraded Points, Alex is a leader in the industry and has earned and redeemed millions of points and miles. He frequently discusses the award travel industry with CNBC, Fox Business...
Edited by: Keri Stooksbury
Keri Stooksbury's image

Keri Stooksbury

Editor-in-Chief

Countries Visited: 44U.S. States Visited: 28

With years of experience in corporate marketing and as the Executive Director of the American Chamber of Commerce in Qatar, Keri is now Editor-in-Chief at UP, overseeing daily content operations and r...

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Everywhere you turn — from credit card reward programs to the flood of credit card offers in the mail — Americans have ample opportunities to open new credit cards. As a result, many Americans accumulate a stack of credit cards in their wallets and, in some cases, significant debt. 

To gauge each state’s dependence on credit cards, we surveyed over 5,000 U.S. credit cardholders across 44 states. We asked them about their reliance on credit cards, including what percentage of their total purchases are put on credit cards, what types of purchases they’re charging, and how frequently they’re paying their credit card balances in full. Read on to discover the dynamics of each state’s relationship with credit cards.

Key Findings

  • The average American puts 48% of their purchases on a credit card
  • In 2024, Americans are more likely to put essential expenses (gas, groceries, utilities, etc.) on a credit card than non-essential expenses (vacations, clothing, entertainment, etc.). On average, over half of Americans’ credit card purchases (53%) are essential items due to the higher cost of living.
  • 46% of Americans don’t pay their credit card balance in full each month.
  • 30% of Americans say it’s been 2 years or longer since they last had a $0 credit card balance, and 13% say they virtually always have a credit card balance.
  • 22% of Americans hit their credit card limit at least once per year, and 42% have requested an increase in their credit card limit from their issuer at least once.
  • A third of Americans (33%) pay $100 or more in credit card interest each month.
  • 74% of Americans depend on their credit cards to cover emergency expenses
  • Over half of Americans (52%) own 3 or more credit cards.

Balancing the Books: Analyzing Each State’s Credit Card Balance

Heatmap showcasing the average credit card balance in every state
Image Credit: Upgraded Points

Credit cards are versatile tools, serving purposes ranging from financing home improvement projects to covering travel expenses, healthcare bills, and more. Despite their convenience, credit card balances can spiral out of control. According to survey results, the average American carries a credit card balance of $3,071.

The top 5 states with the highest credit card balances are:

  1. New Hampshire — $4,485
  2. Maine — $4,435
  3. Wisconsin — $4,347
  4. Alabama — $4,231
  5. Connecticut — $4,201

U.S. credit card debt has surged to a staggering $1.08 trillion. This is due, in part, to rising inflation and increased prices. In the case of New Hampshire, where healthcare and rental costs are notably high, the average credit card balance stands at $4,485. Similarly, Maine, which also grapples with elevated healthcare expenses, secures a spot in the top 5 on our list.

The top 5 states with the lowest credit card balances are:

  1. Hawai’i — $1,502
  2. Washington — $1,729
  3. West Virginia — $1,763
  4. Tennessee — $2,044
  5. Mississippi — $2,217

Surprisingly, Hawaii boasts the lowest credit card balance on our list, with an average of just $1,502. Despite Hawai’i’s reputation for a high cost of living, Hawaiians have managed their credit card balances well. 

It’s worth noting that the average APR for new credit card offers stood at 20.93% as of Q3 2023 — a significant increase of roughly 5 percentage points compared to the beginning of 2022. This may serve as a deterrent for credit card usage across the U.S. 

Debit or Credit? A Look at Each State’s Reliance on Credit Cards

Heatmap showcasing the percentage of purchases each state puts on credit cards
Image Credit: Upgraded Points

We asked Americans how often they reach for their credit cards when purchasing. We found that, on average, Americans use credit cards for 48% of their overall purchases, with millennials leading the way at 50%.

The top 5 states with the largest percentage of purchases put on credit cards are:

  1. Hawai’i — 64.3%
  2. Washington — 58.5%
  3. Massachusetts — 57.2%
  4. New Jersey — 57.1%
  5. Tennessee — 56.6%

Hawai’i holds the lowest credit card balance in our survey, yet residents charge about 64.3% of their purchases to credit cards. Rising prices for groceries, electricity, and gas in Hawai’i (22%, 35%, and 53% increases from 2019 to 2022) could explain why many Hawaiians rely heavily on credit cards for their purchases. Washington holds the second spot on this list, with residents charging over 58% of their purchases to credit cards.

The top 5 states with the smallest percentage of purchases put on credit cards are:

  1. Kentucky — 35.3%
  2. Louisiana — 38.8%
  3. Iowa — 38.9%
  4. Mississippi — 39.3%
  5. West Virginia — 39.5%

Kentucky’s cost of living is 8% below the national average, potentially contributing to its ranking as the state with the lowest percentage of credit card usage for purchases at 35.3%. Louisiana (38.8%), Iowa (38.9%), and Mississippi (39.3%) are close behind in this trend.

Credit Card Usage in America: Spending Patterns, Interest, Credit Limits, and More

Infographic showcasing credit card usage in America
Image Credit: Upgraded Points

We aimed to examine the specifics of American credit card usage, focusing on the variety of expenses covered, the number of credit cards individuals hold, their history of late payments, and other related aspects. 

On the types of expenses charged to credit cards: 

  • In 2024, Americans are more likely to use credit cards for essential expenses like gas, groceries, and utilities than for non-essential items such as vacations, fashion, and entertainment. Essential purchases constitute, on average, over half (53%) of the total credit card spending for Americans. Residents in Illinois are using credit cards for essential expenses the most –– 64.2% of their credit card purchases are on basic living expenses, followed by residents in Wisconsin (62.7%), Kansas (62.4%), and Alabama (61.6%). 
  • 53% of Americans report that in the past year, they have charged more essential expenses like gas, groceries, utilities, and childcare to their credit cards than in previous years. The primary reason for this shift is the continued rising cost of living.

On paying off their balance:

  • 46% of Americans don’t pay their credit card balance in full each month. Millennials (49%) and Gen Xers (53%) are the generations most likely to carry credit card debt from month to month. 
  • 30% of Americans reveal that it has been at least 2 years or longer since they last had a zero balance on their credit cards. Furthermore, 13% admit that they almost always maintain a balance on their credit cards.

On the amount they pay in credit card interest: 

  • One-third of Americans (33%) pay $100 or more in credit card interest every month.

On credit card limits: 

  • 22% of Americans reach their credit card limit at least once a year, while a larger group (59%) state they never hit their credit card limit. Millennials and Generation Xers are the generations that most frequently hit their credit card limits.
  • 42% of Americans have asked their credit card issuer for a limit increase at least once. The primary reasons for this request include wanting to improve their credit score, seeking a safety net for emergencies, and needing to make a specific large purchase.

On missing a payment: 

  • Almost a quarter (24%) of Americans have missed at least 1 credit card payment in the past year. Among these, Generation Z leads, with 30% having missed at least 1 payment, the highest rate compared to other generations.

On using a credit card for emergencies: 

  • 74% of Americans rely more on their credit cards than on debit or savings accounts for emergency expenses. Specifically, 75% of Millennials and 78% of Generation Xers turn to their credit cards over other accounts for unexpected or emergency costs.

On the number of credit cards they own:

  • The majority of Americans (26%) hold 2 credit cards. Over half of the population (52%) possesses 3 or more credit cards. Older generations, including Generation X and baby boomers, tend to have more credit cards than younger generations, with 61% of both baby boomers and Gen Xers owning 3 or more credit cards.

Methodology 

To uncover our credit card debt statistics, we surveyed 5,100 U.S. credit cardholders across 44 states. This survey took place between November 30 and December 18, 2023. Our survey covered various aspects, including inquiries about requesting credit card limit increases, using credit cards for emergencies, frequency of reaching credit card limits, and more. We couldn’t include the following states due to limited survey responses: Alaska, Montana, North Dakota, South Dakota, Vermont, and Wyoming.

Final Thoughts

It’s clear that certain states, such as Hawai’i, Washington, and West Virginia, tend to maintain relatively low credit card balances. In contrast, states like New Hampshire, Maine, and Wisconsin often carry larger credit card balances. On average, Americans are now putting nearly half of all their expenses on credit cards, and they’ve been using their credit cards for more essential expenses due to rising inflation. We hope this article provides insight into how Americans perceive their relationship with credit cards and how much they rely on them.

Alex Miller's image

About Alex Miller

Founder and CEO of Upgraded Points, Alex is a leader in the industry and has earned and redeemed millions of points and miles. He frequently discusses the award travel industry with CNBC, Fox Business, The New York Times, and more.

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