Illinois residents among leaders in paying down credit card debt

With the economy showing signs of life despite the ongoing impact of the COVID-19 pandemic, Illinoisans were among the leaders nationally in paying down credit card debt.

According to the personal finance website WalletHub, Illinois ranked fifth in the nation in paying down debt in the second quarter of this year. Analyst Jill Gonzalez says the pandemic and the tumultuous job market forced people to take a hard look at the finances.

“I think that job security was top of mind, so even if they did not lose their job and lucky enough to hold onto to them, I think they were spending as if they were unsure of the future,” Gonzalez said.

WalletHub’s quarterly credit card studies are based on analysis of the latest data on consumers’ finances available from TransUnion as well as the Federal Reserve and Bureau of Labor Statistics.

According to the study, the average household in Illinois owes $8,339 in credit card debt, following a $491 decrease in the second quarter. Nationally, U.S. consumers paid down $58.1 billion in credit card debt. That followed a record first-quarter pay down of $60 billion. 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.

Gonzalez said spending in the fourth quarter of the year will increase, but will fall far short of last year’s numbers.

“I think we are already expecting about a 40 percent drop than usual,” Gonzalez said. “I think we will see the spending pick up in the fourth quarter, but hopefully we see the paydown continue as well.”

California, Texas and Florida ranked first, second and third, respectively, for the most credit card debt paydown in the country, while the bottom three were Vermont, Wyoming and North Dakota.