By James Farias
Founder & CEO, Relief Strategies, LLC

Quick Summary

As credit card debt continues to grow nationwide, recent data reveals a striking pattern: while most states are seeing increases in average credit card balances, a handful are experiencing declines. Understanding these regional differences offers valuable insight into the economic forces shaping consumer finances and can help individuals better navigate their own debt challenges. This article explores:

• The latest data on where credit card debt is increasing or decreasing across the U.S.
• Key reasons behind these regional differences, from housing costs and employment to population shifts.
• The added impact of inflation, higher interest rates, and tariff policies on household debt.
• What these trends could mean for consumers in the months ahead.
• Practical lessons and steps for managing debt, no matter where you live.

Understanding both the local and national forces shaping credit card debt can help you make smarter financial decisions and stay ahead of potential challenges.

The National Landscape of Credit Card Debt

In the first quarter of 2025, the average credit card debt among cardholders with unpaid balances reached $7,321, up nearly 6 percent from $6,921 in the same period a year earlier.(1,2) This steady rise reflects broader economic pressures such as inflation, rising living costs, and shifting employment landscapes. However, this national average masks significant variation between states, driven by factors including housing costs, income levels, and local economic conditions.

States with Rising Credit Card Debt

Some states stand out for their rapid increases in credit card debt:

• California: The average credit card balance is among the highest in the country at approximately $6,736 per consumer, with debt levels rising alongside soaring housing prices and high living costs.(5) Santa Clarita, California, for instance, was recently ranked as the city with the highest household credit card debt in the nation, averaging $21,625 per household3.
• Washington: With an average balance around $7,002, Washington has seen notable growth fueled by rising home prices and population increases.(5)
• Massachusetts: Reports a high average balance of $7,282, reflecting the state’s elevated cost of living, especially in housing.(5)
• Georgia: With an average debt of $7,112, Georgia has experienced one of the fastest growth rates in recent years, driven by rapid population growth and housing affordability challenges.(5)
• Texas: Despite its large population and diverse economy, Texas shows moderate debt growth with an average balance near $5,993. The state’s relatively lower housing costs help temper credit card debt increases, although recent reports indicate Texas ranks among the top states for total credit card debt added in 2024.(5)

States with Declining Credit Card Debt

In contrast, a smaller group of states is seeing declines in average credit card debt:

• Nevada: Experienced a 2 percent decrease, with average balances falling to approximately $5,811.(5)
• Louisiana: Reports declines, with average debt around $5,304, reflecting ongoing economic restructuring and potentially tighter credit conditions.(5)
• North Dakota: Average credit card debt is about $6,205 and has decreased by nearly 6 percent, a trend linked to the state’s stable employment in energy sectors and slower population growth.(5)

What Drives These Regional Differences?

Several key factors help explain why credit card debt is rising in some states but falling in others:

• Housing Costs: States with high or rapidly rising home prices often see consumers relying more on credit cards to cover everyday expenses. California and Massachusetts are prime examples where housing affordability pressures contribute to growing debt.
• Income and Employment: Median household income and job stability influence debt levels. Some states with higher incomes still carry significant debt, but growth rates vary depending on economic conditions and cost of living.
• Economic Transitions: States undergoing shifts away from traditional industries or experiencing population changes may see unique debt trends. Louisiana’s decline in credit card debt aligns with its economic restructuring, while states with booming populations like Georgia face increased financial strain.

Additional Factors Shaping Debt Trends

While local economics matter, broader forces are also at work:

Inflation’s Impact
Inflation has been a major driver behind rising credit card balances in recent years. As the cost of essentials like groceries, gas, and housing has climbed, more Americans have turned to credit cards to bridge the gap. Nearly one in three now use credit cards to make ends meet, and almost half say inflation has caused them to carry a larger monthly balance.(1,8) Higher prices make it harder to pay off existing debt, leading to more people carrying balances month to month.

Inflation has also pushed credit card interest rates higher. Even as inflation moderates, rates remain well above pre-pandemic levels, making it more expensive for consumers to manage debt.(7)

Tariff and Trade Policy Effects
Trade and tariff policies, such as those debated or enacted in recent years, can also influence consumer debt. Tariffs on imported goods raise prices for everyday items, further fueling inflation and putting additional pressure on household budgets. If new or expanded tariffs are implemented in the future, they could increase reliance on credit cards as consumers struggle to keep up with rising costs.

What the Future Could Hold

Looking ahead, several factors could shape the trajectory of credit card debt:

• Persistent Economic Pressure: If inflation remains elevated or new tariffs are introduced, consumers may continue to depend on credit cards to cover rising costs. This is especially true for those already living paycheck to paycheck.
• Interest Rate Sensitivity: Credit card interest rates, already at historic highs, may not drop quickly even if inflation eases. This means that any new debt will remain costly, making it harder for consumers to pay down balances and potentially leading to higher rates of delinquency.(7)
• Policy and Economic Shifts: Changes in trade policy or further economic shocks could quickly alter the landscape. For example, if tariffs are expanded as part of future policy decisions, consumers may see another round of price increases that could accelerate debt accumulation.
• Inflation-Adjusted Perspective: When adjusted for inflation, the growth in real credit card debt balances is smaller than the headline numbers suggest for most consumers. However, subprime borrowers—those with lower credit scores—have seen real increases in their balances, highlighting that the impact of inflation is not evenly distributed across all households.

What Consumers Can Learn

Understanding these trends helps consumers put their own financial situations into context. Recognizing that rising debt in your state may reflect broader economic pressures can motivate proactive financial management. Likewise, observing states with declining debt can highlight strategies such as focusing on stable employment and managing living costs.

Monitoring local economic conditions and staying informed about regional debt patterns can empower consumers to make better decisions about borrowing and repayment.

Final Thoughts

Credit card debt is a complex issue influenced by many local and national factors. While the national average continues to rise, the story varies widely across states. By paying attention to these regional differences—and the broader economic forces like inflation and trade policy—consumers can gain perspective on their own financial health and better navigate the challenges of managing revolving debt.

This article is based on the latest data from multiple sources, including TransUnion, LendingTree, and state-level economic reports, providing a comprehensive view of the evolving credit card debt landscape in the United States.

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About the Author

James Farias is the CEO of Relief Strategies, LLC, a leading firm dedicated to helping individuals achieve financial freedom through effective debt relief solutions. With over 30 years of business leadership experience and a deep passion for empowering others, James has guided countless clients through the process of reducing debt and regaining control of their finances.

Recognizing how quickly debt can overwhelm even the most disciplined individuals, James focuses on strategies that lower monthly payments, relieve financial stress, and unlock new opportunities. His mission is to help people move beyond financial hardship and build a more secure future.

Connect with James on LinkedIn or visit Relief Strategies to learn more about how he and his team can assist you on your journey to financial wellness.

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Sources

1. LendingTree. “2025 Credit Card Debt Statistics.” LendingTree, June 5, 2025. 
2. USA Today. “Credit card debt shame is real, especially for those making over $100K.” USA Today, June 8, 2025. 
3. LendingTree. “Personal Loan Statistics: 2025.” LendingTree, March 24, 2025. 
4. LendingTree. “Credit Card Confidence Sees 1st 2025 Decrease.” LendingTree, March 17, 2025. 
5. LinkedIn (Kurt Gibson). “2025 Credit Card Debt Statistics | LendingTree.” LinkedIn, January 15, 2025. 
6. LendingTree. “Research & Statistics | LendingTree – Newsroom.” LendingTree, 2025. 
7. CNBC. “Nearly half of credit card users are carrying debt, report finds.” CNBC, January 8, 2025. 
8. LendingTree. “63% of Americans Believe a Recession Is Coming.” LendingTree, May 19, 2025.