Credit card debt: What Minnesota and Wisconsin owe

We were intrigued this morning by new data from the credit reporting company TransUnion showing U.S. credit card balances at their lowest levels in eight years and delinquencies continuing to decline.

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It listed our neighbors as having the nation’s lowest average credit card debt in the second quarter of 2010 — Iowa at $3,792 and North Dakota at $4,097 — but didn’t mention Minnesota or Wisconsin.

David Blumberg of TransUnion just sent us that data. Here are the facts:

DEBT

Minnesota has the 11th lowest credit card debt in the nation at $4,586. That’s down 10 percent from the second quarter of 2009.

Wisconsin has the fifth lowest credit card debt in the nation at $4,160, down 12 percent since the second quarter of 2009.

DELINQUENCY

Minnesota has a 90-day credit card delinquency rate of 0.7 percent, eighth lowest in the nation and down 27 percent from last year (the fourth largest decline in the country)

Wisconsin has a 90-day credit card delinquency rate of 0.7 percent (an additional decimal place puts the Badger State eleventh lowest in the nation), with a 16 percent decline from last year.

Nationally, credit card balances averaged $4,951 in the second quarter of 2010, the first period since the first quarter of 2002 that average credit card debt fell below $5,000.

We’ve been convinced since last fall that a permanent shift toward savings and away from spending and debt is underway.

Minnesotans weren’t the worst in the country when it came to leverage, but it certainly seems like the lessons of our grandparents are sinking in.

Here’s the most recent Federal Reserve Bank of St. Louis chart showing household debt payments as a percentage of disposable income. That debt burden continues to plummet, even during this “recovery.” (Click on the chart for a larger view.)

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The tricky question: Is all this responsibility good for the economy?

In the short term, at least, saving money and paying down consumer debt means people aren’t spending. If people aren’t spending, businesses won’t be hiring.

If businesses don’t hire…well, you get the picture.

Tell us what your household’s doing re: debt, savings and credit cards.

Post something below or contact us directly. We’ll put up any responses we get in a future MinnEcon entry.

  • SLAsheim

    We’re trying to pay off credit cards and we’re

    also saving each month. No vacations this year.