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Credit Card Debt in Washington, D.C.

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Credit cardholders in Washington, D.C., have fewer credit cards and less credit card debt than the average American.

However, that’s where the good news stops. While their debt is relatively low, cardholders in our nation’s capital have one of the highest utilization rates in the U.S. and are more likely to be late with a payment and have a maxed-out credit card than the typical American cardholder.

We take a closer look at credit card debt in Washington, D.C., including how it compares to U.S. states with similar populations and how it stacks up against its neighbors in Virginia, Maryland and Delaware.

We also go beyond the numbers to answer key questions about credit card laws in the nation’s capital.

How much credit card debt does the average Washington, D.C., resident have?

$6,307.

That puts D.C. residents square in the middle of the pack nationally when it comes to credit card debt. D.C. ranks 24th in the nation in card debt, coming in below the national average of $6,569.

The highest and lowest card debt totals in the nation belong to New Jersey and Kentucky, at $7,872 and $7,721, respectively.

What percentage of Washington, D.C., residents are currently at least 30 days late with a credit card payment?

6.8%.

That leaves D.C. cardholders tied with Wyoming and North Carolina for 18th in the nation.

How many credit cards does the average Washington, D.C., resident have?

Just 4.9.

That’s one of the lowest totals in the nation, leaving the nation’s capital tied for third-lowest, with Mississippi and Wyoming.

The only three states whose residents have fewer cards? Montana (4.8 cards), South Dakota (also 4.8 cards) and Alaska (with a national-low 4.5 cards per cardholder).
The national average was 5.6 cards.

What’s the average credit card utilization rate in Washington, D.C.?

41.0%.

It’s the 12th highest total in the nation, coming in well above the national average of 37.7%, and that’s troubling news for D.C. cardholders.

It is concerning because your utilization rate – how much debt you have compared to your available credit – is the second-most important factor in FICO credit scoring formulas. (Only your payment history matters more.)

Experts have long suggested cardholders aim for a utilization rate no higher than 30%. However, the truth is that the lower your utilization rate, the better, and there’s no question that 41% is too high.

The highest and lowest utilization rates are in Mississippi and Illinois, with 48.8 % and 31.0%, respectively.

What percentage of Washington, D.C., residents currently have a maxed-out credit card?

7.1%.

That’s the 12th highest total in the nation and is another sign of D.C. cardholders’ struggles with credit card debt.

D.C.’s percentage is nearly double that of the state with the lowest percentage – Oregon at 3.7% – and is well above the national average of 5.9%. However, the good news is that it is far below the 10.1% seen in Mississippi, which leads the nation.

How does credit card debt in Washington, D.C., compare to that of similar-sized U.S. states?

Washington, D.C., is not a state, despite recent momentum in the movement to make it one.

If it did become a state, it would be the nation’s third smallest by population, assuming that the state’s boundaries would be the same as the current district’s boundaries. Only Wyoming and Vermont are smaller.

With that in mind, we wanted to look at how D.C.’s credit card debt compared to that of the smallest U.S. states – those with fewer than 1 million residents. There were six: Alaska, Delaware, North Dakota, South Dakota, Vermont and Wyoming.

The good news: D.C. cardholders’ average credit card debt was one of the lowest in that group.

The bad news: D.C. cardholders had the highest utilization rate and were the most likely to have a maxed-out credit card.

How does credit card debt in Washington, D.C., compare to that of its neighboring states?

When you compare the credit card debt of Washington, D.C., residents to those of their neighbors in Virginia, Maryland and Delaware, the results again are mixed.

D.C. residents have far less credit card debt on average than their neighbors – over $1,000 less than both Maryland and Virginia.

However, they’re having much more trouble making payments. Cardholders in D.C. have higher utilization rates, are much more likely to be late with a payment and have a maxed-out card.

Credit card laws in Washington, D.C.

Credit card laws can be very different throughout the nation, and Washington, D.C., is no exception. Below are answers to some of the most commonly asked questions about credit card laws and regulations in our nation’s capital.

What is the statute of limitations on collecting credit card debt in Washington, D.C.?

Three years from when you last made a payment on the account.

However, it is important to understand that if you verbally agree to pay the debt – even if it is past the three-year limit – you may end up restarting the clock on that debt and making it collectable again.

Can your wages be garnished for credit card debt in Washington, D.C.?

Yes, but it typically requires a court judgment.

D.C. law also puts further restrictions on just how much of your wages can be garnished at a time. The limit, per Nolo.com, is “is 25% of the amount by which your disposable wages for that week exceed 40 times the D.C. minimum hourly wage.”

Are credit card surcharges legal in Washington, D.C.?

Yes. There is no law restricting credit card surcharges in Washington, D.C.

Sources

  • More than 1 million anonymized LendingTree users’ credit reports from January 2021 through February 2021
  • ProtectingConsumerRights.com
  • NOLO.com
  • NCSL.org