Credit card holders now owe around $1.3 trillion in debt, after adding $52 billion last year, according to WalletHub.
The financial wellness site ranks states by the time it takes to pay off those bills, with Alaska winning the dubious distinction of 16 months and 10 days to clear the books. The average Alaskan pays just $259 toward their credit card bill each month, with median debt spread across an average of 2.84 credit cards per person.
Mississippi resides at the other end of the spectrum, taking a mere nine months and 30 days to eliminate that debt. It's also one of the nation's poorest states, with average full-time salaries just $54,203 in 2023. This raises more questions than answers because low-income individuals and families have greater demand for debt to make ends meet, while having a tougher time paying it off.
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WalletHub collected TransUnion data on median credit card debt and average monthly payments, combining the two to rank their 50 states and District of Columbia listicle. Using this methodology, a state with high debt and low payments takes the longest to pay off debt, while low debt and high payments takes the shortest. The results offer unique insight into stress levels of American families trying to make ends meet in 2025.
Median credit-card debt ranged from $2,148 to $3,683 in the report while finance charges stretched from $226 to $553. There was no obvious connection between geography, income and indebtedness, with coastal, Sun Belt and Midwestern states scattered all across the results. For example, Massachusetts had the highest median income of the 50 states but ranked 12th worst in payoff time and 19th highest in median debt.
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"Looking at the median credit card debt in a state can give you a good idea of whether people are struggling or doing well compared to people in other states," WalletHub analyst Chip Lupo says, adding it's also "important to look at how much residents put toward paying their debts off each month. Low average payments lead to long payoff timelines, which in turn lead to high amounts of interest accrued."
He points to Vermont as a relatively prosperous state that took 14 months and six days to pay off credit-card debt, third longest in the survey. Median debt ranked 18th best in the Green Mountain state but Vermonter payments lagged the competition at $209 per month, yielding a bearish result. Mississippi placed first in timely payoff, once again refuting correlation between family income and debt burden.
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Consumers pay an average 21.9% interest rate, according to the report. Finance charges accumulate and compound over time so states with the worst rankings also pay the highest fees for that debt. For example, it takes $553 in interest charges in Alaska to pay off a $3,683 credit card bill, adding 15% to the final cost. Mississippi families, on the other hand, pay just $227 in interest changes to clear the books, adding just 9.2%.
“People get in trouble with credit cards by carrying balances, which typically come with high interest rates” warns Certified Financial Planner Gary Simmerman. “Credit cards should be used for convenience, not for making purchases that you haven't budgeted for and can't afford. Only make credit card purchases that you can immediately pay in full.”
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