By Hank Russell
A report recently found that young adults ages 18 to 34 in New York State carry the sixth-largest amount of credit card debt.
According to Upgraded Points, young adults in New York carry an average balance of $4,332 on their credit cards. Alaska led the nation with an average of $4,836, followed by Hawaii ($4,826), Nevada ($4,799), California ($4,536) and Colorado ($4,379). The data was compiled from the Consumer Credit Explorer by the Federal Reserve Bank of Philadelphia.
The report also found that 13.5% of young cardholders have severely delinquent debt — that is, those who are 90 days delinquent or longer, according to Upgraded Points. While that is the 19th-lowest in the U.S. — Utah had the lowest percentage at 9.1% — that is up from 9.7% three years ago, when the state had the 18th-lowest figure. Again, Utah had the fewest delinquencies in 2022, percentagewise, at 6.4%.
Lastly, Upgraded Points found that 30.3% of New York’s young cardholders used more than 75% of their limit, which is the ninth-lowest in the nation. Massachusetts had the lowest percentage, with a little more than one in four — 25.9% — using more than three-fourths of their credit limit.
According to Debt.com, keeping credit utilization below 30% is ideal; bringing it down to less than 10% may result in higher credit scores. Additionally, credit card usage makes up approximately 30% of a cardholder’s credit score.
Keri Stooksbury, the report’s author, said that, contrary to what people might say, the high percentage of credit card use and size of debt are not the result of frivolous spending.
“For young Americans navigating the early stages of their careers, this analysis shows that the risk of falling into severely delinquent credit card debt is not evenly distributed but deeply connected to local economic conditions,” Stooksbury said.
“In some parts of the country, a combination of stagnant wages and a rising cost of living creates a tight financial squeeze, making it difficult for many to get by without relying on credit,” she continued. “In other areas, robust job markets with higher salaries provide a crucial buffer, allowing young adults to manage their expenses and build a stronger financial foundation.”
Some of the reasons for the high credit card debt and credit utilization, according to Stooksbury, include a competitive job market, not enough money in their savings account and the return of student loans. As a result, more younger cardholders are falling behind on their payments.
“This financial pressure is especially acute for younger generations, who are navigating the early stages of their financial lives in a particularly unforgiving economic climate,” she said.