Checking Account Archives

February 4, 2021

States Where Residents Most Rely on Credit â 2020 Edition

Image shows four credit cards stacked on top of one another. SmartAsset analyzed various data points to find where residents most rely on credit.

Perhaps counterintuitively, consumer credit card debt has fallen since the beginning of the COVID-19 crisis. Federal reserve data shows that the total amount of revolving consumer credit, which primarily consists of credit cards charges, fell below one trillion in April 2020 for the first time in close to two years. Data from Experian tells a similar story. Between the end of Q2 2019 and Q2 2020, the average credit card balance of borrowers fell by about 11% from $6,629 to $5,897.

Though average credit card debt is decreasing nationally, it remains high in some states and may increase during the holiday season. In this study, SmartAsset looked at states where residents tend to rely on credit the most. Using data from Experian and the Census Bureau, we ranked all 50 states and the District of Columbia based on five metrics relating to credit card debt. For details on our data sources and how we put all the information together to create our final rankings, check out the Data and Methodology section below.

This is the 2020 edition of our study on where residents most rely on credit. Read the 2019 version here.

Key Findings

Credit card debt is high in Southern states. Seven of the 10 states where residents rely most on credit are in the South: Oklahoma, Louisiana, Texas, South Carolina, Alabama, Georgia and Florida. In all seven states, average credit card debt exceeds $5,600 and makes up more than 10% of the median household income.
13 states saw one-year increases in average credit card debt. Though Experian data shows that national average credit card debt fell by 11.04% over the past year, certain states still saw increases. Average credit card debt increased by more than 3% in two states â Idaho and North Dakota â and rose by 1% or more in six additional states â Oklahoma, Hawaii, Mississippi, West Virginia, South Dakota and Iowa.

1. Oklahoma

Oklahoma ranks as the state where residents most rely on credit. Experian data shows that though average credit card debt fell in many places between the end of the second quarter in 2019 and 2020, it rose by 2.00% in Oklahoma, from about $5,800 to almost $6,000. With that rise, we estimate average credit card debt for Oklahoma residents makes up 10.96% of the median household income â the fourth-highest percentage for this metric in our study.

2. Louisiana

Though average credit card debt in Louisiana ranks toward the middle of the study at 24^th, it makes up the second-highest percentage of median household income, at 11.25%. Additionally, credit card debt may build up in Louisiana, as the state has relatively high poverty and unemployment rates. Data from the Census and Bureau of Labor Statistics shows that Louisiana also has the second-highest poverty rate (14.3%) and 15^th-highest September 2020 unemployment rate overall (8.1%).

3. Alaska (tie)

Average credit card debt in Alaska fell by close to 5% over the past year, but it is still the highest in our study, at close to $7,700. Additionally, Alaska ranks in the worst half of the study for two other metrics, average credit card debt as a percentage of income and September 2020 unemployment rate. Average credit card debt makes up 10.15% of the median household income (the 10^th-worst rate for this metric overall). In September of this year, unemployment stood at 7.2% (the 23^rd-worst in the study).

3. Nevada (tie)

Nevada ranks in the bottom half of the study for all five metrics we considered. It has the 11^th-highest average credit card debt, the 22^nd-worst one-year change in average credit card debt and the 17^th-highest average credit card debt as a percentage of median household income. Census Bureau data from 2019 shows that Nevada has the 20^th-worst poverty rate of all 50 states and the District of Columbia, at 8.7%. Moreover, in September 2020, the unemployment rate (12.6%) was the second-highest in the country, behind only that of Hawaii.

3. Texas (tie)

Texas ties with Alaska and Nevada as the No. 3 state in the country where residents rely most on credit. Though average credit card debt in Texas fell by almost 5% over the past year, it remains elevated compared to other states. Experian data shows that at the end of the second quarter in 2020, average credit card debt was $6,423 â the seventh-highest of any state. Additionally, Texasâ poverty rate is the ninth-highest in the study, at 10.5%.

6. New Mexico

Credit card debt in New Mexico is high relative to average incomes. We found that average credit card debt as a percentage of the median household income was third-highest in our study, at 10.98%. New Mexico residents may also struggle with credit card debt more, as unemployment and poverty rates are high. In 2019, the unemployment rate was 9.4% (eighth-highest in the study) and in September 2020, the poverty rate was 13.7% (the third-worst in the country).

7. South Carolina

South Carolina actually has the lowest September 2020 unemployment rate (5.1%) of any of the 10 states where residents most rely on credit. However, the state ranks relatively poorly on the other four metrics we considered. It has the 18^th-highest average credit card debt, 14^th-worst one-year change in average credit card debt, eighth-highest average credit card debt as a percentage of income and 11^th-highest poverty rate.

8. Alabama

Using Experian and Census Bureau data, we found that average credit card debt for Alabama residents makes up almost 11% of the stateâs median household income. Additionally, Alabama has the sixth-highest 2019 poverty rate (11.2%) of all 50 states and the District of Columbia.

9. Georgia

At the end of the second quarter of 2020, average credit card debt in Georgia stood at roughly $6,200. This debt may affect residents more in Georgia, as debt makes up more than 10% of the median household income in the state. In addition, almost 10% of individuals fall below the federal poverty line.

10. Florida

Florida has the 12^th-highest average credit card debt (about $6,100) and ninth-highest average credit card debt as a percentage of median household income (10.31%). In September 2020, the unemployment rate in Florida was the 20^th highest in the country, at 7.6%.

Data and Methodology

To determine the states where residents rely most on credit, we compared all 50 states and the District of Columbia across five metrics:

Average credit card debt. Data comes from Experian and is for Q2 2020.
One-year change in average credit card debt. Data comes from Experian and is from Q2 2019 to Q2 2020.
Average credit card debt as a percentage of median household income. This is the average credit card debt (per borrower with credit card debt) divided by median household income. Data for average credit card debt comes from Experian and data on median household income comes from the Census Bureauâs 2019 1-year American Community Survey.
September 2020 unemployment rate. Data comes from the Bureau of Labor Statistics.
Poverty rate. This is the percentage of the population below the federal poverty level. Data comes from the Census Bureauâs 2019 1-year American Community Survey.

First, we ranked each state in every metric, giving a double weight to both of the average credit card debt metrics, a single weight to the change in average credit card debt metric and a half weight to September 2020 unemployment rate and poverty rate. We then found each stateâs average ranking and used the average to determine a final score. The state with the best average ranking received a score of 100. The state with the lowest average ranking received a score of 0.

Tips for Managing Credit Card Debt During the COVID-19 Downturn

Contact your credit card company. Many credit card companies are offering financial relief to their customers during the COVID-19 pandemic. The Consumer Financial Protection Bureau recommends that the best first steps in receiving relief are contacting your credit card company, telling them youâve been affected and asking questions about the relief packages they offer.
Create a plan to pay it off. Credit card debt can be incredibly stressful, especially during a recession when jobs are less secure and employment opportunities are more limited. Our credit card calculator is here to help. By adding your credit card details, you can calculate the total interest and time it will take you to pay off your debt.
Consider a financial advisor. A financial advisor can help you make smarter financial decisions to be in better control of your money and get previous debt under control. Finding the right financial advisor doesnât have to be hard. SmartAssetâs free tool matches you with financial advisors in your area in five minutes. If youâre ready to be matched with local advisors that will help you achieve your financial goals, get started now.

Questions about our study? Contact us at [email protected].

Photo credit: Â©iStock.com/bernie_photo

The post States Where Residents Most Rely on Credit â 2020 Edition appeared first on SmartAsset Blog.

Source: smartasset.com

January 13, 2021

Best Cities for Womenâs Pay â 2021 Edition

By Renee Powell in Checking Account Tag best cities for women's pay, Checking Account, Cities, earnings, Financial Goals, Financial Wize, FinancialWize, Florida, money, pay gap, paycheck, savings, women's pay

Image shows a woman who is wearing glasses sitting at a desk in front of a laptop and removing a paycheck from an envelope in her hands. SmartAsset analyzed data to find the best cities for women's pay.

Womenâs earnings in the U.S. make up about 81% of menâs, according to Census Bureau data from the past several years. Though this figure has steadily grown over the course of decades, researchers predict the economic effects of the COVID-19 pandemic could set back pay for women. Bureau of Labor Statistics data unequivocally shows that the COVID-19 crisis has had a disproportionate impact on womenâs participation in the labor force and unemployment, and many analysts theorize this will carry over to womenâs earnings.

In this study, SmartAsset uncovered the best cities for womenâs pay leading up to the COVID-19 pandemic. We compared the 150 largest U.S. across four metrics: median earnings for women, growth in womenâs earnings, womenâs earnings as a percentage of menâs earnings and the change in womenâs earnings as a percentage of menâs earnings. Both metrics that examine changes over time consider the years 2017 and 2019. For details on our data sources and how we put all the information together to create our final rankings, check out the Data and Methodology section below.

This is SmartAssetâs third annual study on the best cities for womenâs pay. Check out the 2020 version here.

Key Findings

Midwestern cities lag. Among the top 10 cities for womenâs pay, the Northeast, South and West are all represented. There are two cities in the Northeast, three in the South and five in the West. The first Midwest city in our ranking, however, is Overland Park, Kansas, coming in at 19^th. Though both Chicago, Illinois and Cleveland, Ohio squeeze into our top 25, womenâs earnings fall significantly short of menâs. The pay gap in all three Midwest cities in our top 25 is greater than 10%.
Median earnings for women do not equal or surpass menâs earnings in any city in our study. Last year, we found that median earnings for women were equal to or exceed median earnings for men in four cities: Yonkers, New York; Spring Valley, Nevada; Tempe, Arizona and Aurora, Colorado. Though Sacramento, California has the highest womenâs earnings as a percentage of menâs earnings this year, it is still at 99.05%.

1. Raleigh, NC

Raleigh, North Carolina ranks in the top quartile of cities for all four metrics in our study. It has the 32^nd-highest median earnings for women (about $50,300), and womenâs earnings make up the 10^th-highest percentage of menâs earnings (almost 96%). Between 2017 and 2019, Raleigh had the sixth-greatest increase in earnings for women (18.62%) and fourth-highest increase in womenâs earnings as a percentage of menâs earnings (13.05%).

2. Tacoma, WA

Women in Tacoma, Washington earn roughly $49,700 on average. Though this figure does not fall in the top fifth of the study, Tacoma ranks within the top 15 cities for our other three metrics: Womenâs earnings increased by more than 17% between 2017 and 2019 and womenâs earnings make up about 93% of menâs earnings â almost 10% higher than in 2017.

3. Huntington Beach, CA

Womenâs earnings as a percentage of menâs earnings increased the most in Huntington Beach, California compared to any other city in our study. Census Bureau data shows that the gender pay gap closed by almost 16% between 2017 and 2019. Huntington Beach also has the 12^th-highest median earnings for women, at $61,148.

4. Sacramento, CA

Sacramento, California has the smallest pay gap of all 150 cities in our study. In 2019, womenâs earnings made up 99.05% of menâs earnings. This figure is 7.27% higher than it was 2017. As a gross figure, median earnings for women in Sacramento are about $50,400, 31^st-highest of the cities we considered.

5. Jersey City, NJ

Earnings for women in Jersey City, New Jersey grew by the second-highest rate of any city in the study. Between 2017 and 2019, median womenâs earnings increased by 22.82%. As a result of that growth, 2019 median earnings for women in Jersey City are the seventh-highest overall, at $62,530.

6. St. Petersburg, FL

Womenâs earnings in St. Petersburg, Florida have grown substantially over the past couple years. In 2017, median earnings for women were less than $40,400, and in 2019, they were greater than $45,700 â marking a two-year growth of 13.39%, 19^th-highest in our study. Relative to men, women in St. Petersburg earn about 8% less on average.

7. Honolulu, HI

Honolulu, Hawaii ranks in the top third of our study for all four metrics we considered. It has the 38^th-highest median earnings for women (about $47,700) and ranks 45^th-best for womenâs earnings as a percentage of menâs earnings (88.51%). Between 2017 and 2019, the capital of Hawaii had the 20^th-greatest increase in womenâs earnings (13.24%) and 19^th-largest change in womenâs earnings as a percentage of menâs earnings (almost 7%).

8. Portland, OR

From 2017 to 2019, median earnings for women in Portland, Oregon increased by 18.40% â the third-highest increase of any city in our top 10 and seventh-largest overall. With that increase, Portland has the 17^th-highest 2019 median earnings for women, at more than $55,200.

9. Baltimore, MD

Baltimore, Maryland ranks in the top 20 cities of the study for two metrics: womenâs earnings as a percentage of menâs earnings (92.31%) and growth in womenâs earnings as a percentage of menâs earnings (6.47%). Census Bureau data from 2019 shows that median earnings for women in Baltimore are about $47,500, 39^th-highest across all 150 cities in our study.

10. Boston, MA

Boston, Massachusetts rounds out our list of the top cities for womenâs pay. Womenâs earnings in Boston are the 11^th-highest in our study, at roughly $61,700. Boston additionally ranks in the top 25 for womenâs earnings as a percentage of menâs earnings (91.88%) and the two-year growth in womenâs earnings (12.23%).

Data and Methodology

To find the best cities for womenâs pay, SmartAsset looked at the 150 largest cities in the U.S. We compared those cities across four metrics:

Median earnings for women. Data comes from the Census Bureauâs 2019 1-year American Community Survey.
Womenâs earnings as a percentage of menâs earnings. This is median earnings for women divided by median earnings for men. Data comes from the Census Bureauâs 2019 1-year American Community Survey.
Growth in womenâs earnings. This is the change in median earnings for women from 2017 to 2019. Data comes from the Census Bureauâs 2017 and 2019 1-year American Community Surveys.
Growth in womenâs earnings as a percentage of menâs earnings. This is the difference between womenâs earnings as a percentage of menâs earnings in 2017 and 2019. Data comes from the Census Bureauâs 2017 and 2019 1-year American Community Surveys.

In all cases, earnings figures are for full-time workers 16 years and older.

To determine our final list, we ranked each city in every metric, giving a full weighting to all metrics. We then found each cityâs average ranking and used the average to determine a final score. The city with the best average ranking received a score of 100. The city with the lowest average ranking received a score of 0.

Tips for Maximizing Your Paycheck

Contribute to a 401(k). A 401(k) is an employer-sponsored defined contribution plan in which you divert pre-tax portions of your monthly paycheck into a retirement account. Some employers will also match your 401(k) contributions up to a certain percentage of your salary, meaning that if you chose not to contribute, you are essentially leaving money on the table. Take a look at our 401(k) calculator to see how you and your employerâs contributions can add up.
Consider professional help. A financial advisor can help you make smarter financial decisions to be in better control of your money. Finding the right financial advisor doesnât have to be hard. SmartAssetâs free tool matches you with financial advisors in your area in five minutes. If youâre ready to be matched with local advisors that will help you achieve your financial goals, get started now.

Questions about our study? Contact us at [email protected].

The post Best Cities for Womenâs Pay â 2021 Edition appeared first on SmartAsset Blog.

Source: smartasset.com

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