Other state residents doing better paying down debt: Study

LEXINGTON, Ky. (WTVQ) – Residents of many other states are paying down household credit card debt during the coronavirus pandemic faster than Kentucky residents, according to a new analysis.

Americans began 2020 owing more than $1 trillion in credit card debt after a $76.7 billion net increase during 2019. Consumers quickly changed course, however, posting the biggest first-quarter credit card debt paydown ever, at $60 billion, according to the analysis by the personal finance web site WalletHub.

This was followed by another record between April and June, when consumers payed down $58 billion more in credit card debt. Although first quarter paydowns are normal, the second quarter of 2020 was not, according to Wallethub.

In fact, 2020 marked the first time in more than 30 years credit card debt has dropped from April through June.

As a result, WalletHub now projects that U.S. consumers will end the year with a slight reduction in credit card debt for the first time since the end of the Great Recession in 2009.

The analysis is based on the latest data available from TransUnion and the Federal Reserve.

This record reduction in credit card debt has been driven largely by generous unemployment benefits, the coronavirus relief checks from the government in May,  and household austerity measures stemming from the pandemic.

WalletHub’s new Credit Card Debt Study (https://wallethub.com/edu/cc/credit-card-debt-study/24400/) revealed U.S. consumers paid down $118 billion in credit card debt during the first half of 2020 – an all-time record.

Not all areas of the country will fare as well as others, however, judging from the most recent data. WalletHub compared how credit card debt levels changed across all states during the second quarter.

Overall, Kentucky raked 29th in the dent residents made in their credit card debt. That was behind all its neighboring states.

Illinois was 5th best, Ohio 8th, Virginia 10th, Tennessee 17th, Indiana 19th, and Missouri, 20th.

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