10 States With the Worst Credit Habits

Credit cards offer convenience and some potentially valuable rewards if you’re using them to earn points or miles but it’s easy to get in over your head. According to the Federal Reserve, the typical credit card holder averages 3.7 cards*, while the average Credit Sesame member has slightly more, at 4.6. Approximately 34% of households that carry credit cards are rolling a balance over from month to month.

Based on Credit Sesame’s 7 million members, we examined the states that had the worst credit habits. We looked at credit utilization (how much credit people are using, compared to how much overall credit they have), along with the percentage of those who were over their credit limits.

Is your state on the list? Have you checked your credit lately? Check it on Credit Sesame for free and see how you stack up against other residents in your state.

#10 South Carolina

South Carolina

Snapshot:

Average credit limit: $14,182

Average credit utilization: 59.7%

Percentage of people over limit: 15.3%

According to our Credit Sesame data, South Carolinians have 4.1 cards on average and are using close to 60% of their available credit. The Palmetto State ranked lowest overall for the number of people who are over their credit limit.

#9 Michigan

Michigan

Snapshot:

Average credit limit: $14,575

Average credit utilization: 57.7%

Percentage of people over limit: 14.7%

Michigan has the lowest average credit utilization ratio in our rankings but it didn’t score so well on other counts. The average number of credit cards climbs to 4.3 and the average balance is just over $4,000.

#8 Indiana

Indiana

Snapshot:

Average credit limit: $14,368

Average credit utilization: 58.1

Percentage of people over limit: 15.1%

Indiana is at the lower end of the scale in terms of credit utilization but it has a higher percentage of people who have exceed their limit compared to some of the other states on our list. It falls in the middle of the pack for average credit card limit.

#7 Ohio

Ohio

Snapshot:

Average credit limit: $15,651

Average credit utilization: 58.9%

Percentage of people over limit: 14.8%

The Buckeye State has a higher average credit limit than some of the other states in the top 10 and residents are definitely taking advantage of that. Ohioans carry 4.5 cards on average, the most of any state in our rankings.

#6 North Carolina

NC

A North Carolina morning. Raleigh, the capital of North Carolina, has a cost of living 0.50% higher than the U.S. average, according to bestplaces.net. Image source: http://bit.ly/23ys4eG

Snapshot:

Average credit limit: $15,750

Average credit utilization: 61.4%

Percentage of people over limit: 14.6%

North Carolina has the highest credit limit overall in our study but also one of the highest utilization rates. The average card value is also the highest, at $4,386.

#5 Tennessee

Nashville

Snapshot:

Average credit limit: $13,519

Average credit utilization: 59.5%

Percentage of people over limit: 15.3%

Tennessee residents have four credit cards on average and they’re using close to 60% of their available credit at any given time. It ties with South Carolina for the fourth highest percentage of people who are over their credit limit.

#4 Kentucky

Photo Source: http://bit.ly/1nU3B31

Home prices in Newport, Kentucky range from $39,000 to $1 million, according to Zillow. This house was from the East Row Historic District of Newport. Photo Source: http://bit.ly/1nU3B31

Snapshot:

Average credit limit: $12,253

Average credit utilization: 61.6%

Percentage of people over limit: 16.8%

Residents of the Bluegrass State are largely in the red when it comes to their credit cards. Kentucky has the second lowest credit limit, the second highest utilization rate and the highest percentage of people who have gone over their credit line.

#3 Georgia

georgia

Snapshot:

Average credit limit: $15,692

Average credit utilization: 60.3%

Percentage of people over limit: 14.9%

Two things in particular pushed Georgia to the number three spot on our list. First, it has the highest number of people who are over their limit. Aside from that, the average card balance is the second highest overall.

#2 Louisiana

Photo Source: http://bit.ly/1SgYqHj

These are homes in New Orleans’ Musicians’ Village, one of “the largest-scale, highest-profile, and biggest-budget rebuilding project to have gotten underway in New Orleans post-Katrina.” Photo Source: http://bit.ly/1SgYqHj

Snapshot:

Average credit limit: $12,249

Average credit utilization: 60.4%

Percentage of people over limit: 15.7%

Louisiana comes in second place thanks to the fact that residents have the lowest average credit limit in our rankings. It ranks in the top five in terms of credit utilization and second for the percentage of card users who are over limit.

#1 Alabama

Photo Source: http://bit.ly/1PKukeL

Snapshot:

Average credit limit: $12,772

Average credit utilization: 62.1%

Percentage of people over limit: 16.3%

Alabama boasts the second lowest credit card value overall but that wasn’t enough to outweigh the fact that its residents are using the highest percentage of their credit lines. The percentage of people who are over their limit here is the second highest in our rankings.

Methodology

As mentioned earlier, we drew on Credit Sesame’s internal database of over 6 million users to compile our rankings. We collected some specific information for each state, including

  • Total number of Credit Sesame users
  • Average number of credit cards
  • Average credit card value
  • Average credit limit
  • Average credit utilization
  • # of people over their limit
  • Percentage of people over their limit

We then narrowed the field to the 25 states with the highest number of Credit Sesame users. From there, we assigned each one a ranking across four specific categories: average credit limit, average credit utilization, the number of people over limit and the percentage of people over limit.

Each state was assigned a score ranging from 1 to 25 in each category. Those scores were then averaged for each state. The 10 states with the lowest total scores are the ones that made it into our rankings. They’re listed here from 10 to 1, with 1 being the worst state for credit overall.

Sources

Average number of credit cards: http://www.bostonfed.org/economic/rdr/2014/rdr1401.pdf

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