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COVID-19: Consumers Reduce Overall Debt During Pandemic

With much of the country staying home and having limited access to brick-and-mortar businesses, consumer spending during COVID-19 has undergone historic change. Whether for financial reasons or simply due to fewer opportunities, 32% of U.S. consumers say they are spending less or trying to cut back, according to the Experian Consumer Sentiment Index.

When spending changes, consumer debt often fluctuates—especially when consumers cut back on nonessential purchases. This trend in debt is apparent now, and credit data shows that consumers' use of most types of credit has slowed since the onset of the pandemic.

COVID-19 Effects on Consumer Debt

As part of our ongoing commitment to helping consumers manage the impacts of COVID-19, Experian analyzed credit data to see how consumer debt has changed in recent months.

Our analysis is based on monthly consumer credit data between January 2020 and May 2020 using a nationally representative sample of Experian's main consumer credit database. Credit score information is based on VantageScore® 3.0. The data attributes and sample sizes for this research may not exactly match other Experian analyses, and thus a slight variance in some statistics may exist.

As Americans continue to manage the effects of the pandemic, the data included in our analysis will continue to evolve. The information included here represents only a momentary snapshot of consumer finances. As time goes on—especially as aspects of economic stimulus and relief efforts expire—these trends may change. We will continue to publish additional insights as newer data becomes available.

Most States See Decreases in Debt

Despite widespread unemployment and loss of income during COVID-19, consumer debt balances have decreased over the past several months. From January 2020 to May 2020, consumers across the U.S. saw their total average debt dropped by 1%.

Average consumer debt totals have decreased in the majority of states since January 2020, according to Experian data. Consumer debt balances decreased in 30 states and increased everywhere else, including Washington, D.C. Some areas even recorded double-digit changes in the five-month period.

Change in Total Average Debt Since January 2020
StateJanuary 2020May 2020Change
Alabama$66,946$67,523+1%
Alaska$115,863$96,855-16%
Arizona$96,326$93,464-3%
Arkansas$64,251$63,639-1%
California$125,891$126,707+1%
Colorado$125,005$125,955+1%
Connecticut$106,453$99,611-6%
Delaware$87,987$91,566+4%
District of Columbia$151,580$147,080-3%
Florida$78,057$79,157+1%
Georgia$80,114$80,430+0%
Hawaii$124,267$138,727+12%
Idaho$96,026$92,169-4%
Illinois$82,259$80,270-2%
Indiana$70,283$67,767-4%
Iowa$70,570$71,479+1%
Kansas$72,290$66,068-9%
Kentucky$65,483$63,134-4%
Louisiana$69,433$68,869-1%
Maine$72,990$73,273+0%
Maryland$121,644$120,848-1%
Massachusetts$108,652$110,863+2%
Michigan$69,073$66,825-3%
Minnesota$95,318$93,526-2%
Mississippi$55,536$58,056+5%
Missouri$74,180$73,343-1%
Montana$80,558$91,079+13%
Nebraska$69,033$72,295+5%
Nevada$99,641$95,736-4%
New Hampshire$99,821$88,680-11%
New Jersey$99,501$99,527+0%
New Mexico$81,154$77,490-5%
New York$82,241$82,561+0%
North Carolina$83,244$81,113-3%
North Dakota$80,308$77,208-4%
Ohio$66,302$67,444+2%
Oklahoma$65,360$63,594-3%
Oregon$107,441$99,911-7%
Pennsylvania$76,732$75,314-2%
Rhode Island$88,431$86,445-2%
South Carolina$75,467$77,486+3%
South Dakota$75,719$78,299+3%
Tennessee$75,898$79,110+4%
Texas$77,553$76,689-1%
Utah$106,873$109,446+2%
Vermont$88,971$88,6440%
Virginia$118,992$117,155-2%
Washington$124,525$119,894-4%
West Virginia$58,358$55,475-5%
Wisconsin$72,979$77,439+6%
Wyoming$107,537$83,345-22%

Source: Experian

Average Credit Card Debt Falls in All States

Consumers in the U.S. decreased their card balances by 14% from May 2020 to January 2020. The reduction accounted for most of the change in overall debt and is significantly larger than the reduction seen during the same period in 2019, when credit card balances shrank by less than 3%. Nationally, the average credit card balance has dropped from $6,193 to $5,338 since January.

Unlike total debt balances, which increased in some states, average credit card debt decreased in all 50 states and the District of Columbia, since the beginning of the year. Delaware saw the lowest rate of change, but still recorded a 5% decrease in the five-month period. The largest decrease occurred in Wyoming, where consumers shrank their credit card balances by 24%.

Change in Average Credit Card Debt Debt Since Jan 2020
StateJanuary 2020May 2020Change
Alabama$5,590$5,138-8%
Alaska$7,965$6,424-19%
Arizona$6,226$5,342-14%
Arkansas$5,578$4,634-17%
California$6,274$5,433-13%
Colorado$6,462$5,461-15%
Connecticut$7,151$5,995-16%
Delaware$5,701$5,420-5%
District of Columbia$7,913$6,373-19%
Florida$6,466$5,772-11%
Georgia$6,688$5,715-15%
Hawaii$6,702$6,243-7%
Idaho$5,471$4,667-15%
Illinois$6,445$5,402-16%
Indiana$5,284$4,532-14%
Iowa$4,959$4,278-14%
Kansas$5,859$4,696-20%
Kentucky$5,220$4,627-11%
Louisiana$6,030$5,445-10%
Maine$5,285$4,724-11%
Maryland$7,113$6,177-13%
Massachusetts$6,443$5,147-20%
Michigan$5,613$4,509-20%
Minnesota$5,663$4,730-16%
Mississippi$5,068$4,617-9%
Missouri$5,699$5,026-12%
Montana$5,520$4,974-10%
Nebraska$5,583$4,841-13%
Nevada$6,412$5,511-14%
New Hampshire$6,255$5,382-14%
New Jersey$7,098$6,250-12%
New Mexico$6,020$5,368-11%
New York$6,540$5,510-16%
North Carolina$5,928$5,305-10%
North Dakota$5,722$4,588-20%
Ohio$5,555$4,828-13%
Oklahoma$5,853$5,174-12%
Oregon$5,637$4,739-16%
Pennsylvania$5,989$5,033-16%
Rhode Island$6,447$5,176-20%
South Carolina$6,054$5,465-10%
South Dakota$5,617$4,585-18%
Tennessee$5,636$5,025-11%
Texas$6,855$5,901-14%
Utah$5,619$4,950-12%
Vermont$6,061$4,899-19%
Virginia$6,954$6,049-13%
Washington$6,241$5,232-16%
West Virginia$5,266$4,658-12%
Wisconsin$4,851$4,422-9%
Wyoming$6,346$4,831-24%

Source: Experian

Personal Loan Balances Show Biggest Increase

Among all debt categories, personal loan balances have increased the most since January 2020, according to Experian data. Overall, consumers' personal loan debt grew by 2% since the beginning of the year, with the average balance increasing from $15,965 to $16,257.

Mortgage Balances Increase Since January

Mortgage debt was the only other major credit type where consumers saw increased balances since January 2020. Consumers' average mortgage balance rose 1% from $202,480 to $203,986, according to Experian data. In contrast, home loan balances grew less than one-tenth of 1% between January and May of 2019.

Despite Economic Downturn, Some Consumers See Financial Gains

COVID-19's impact on the economy has cut deep, causing some economic indicators to drop to lows not seen since the Great Depression. But while millions lost their jobs and millions more had their incomes reduced, some have seen improvements in their debt levels and credit.

This isn't to say COVID has not caused widespread financial strain—it has. Much of the damage to consumer finances may not be apparent in credit reports and debt numbers, and instead has hit closer to home, impacting their ability to sustain everyday expenses.

As localities emerge from stay-at-home orders (albeit slowly and with several pauses around the country), consumer spending is likely to change again. Additional adjustments may also appear as aspects of government relief programs expire over the coming months.

Methodology: The analysis results provided are based on an Experian-created statistically relevant aggregate sampling of our consumer credit database that may include use of the FICO® Score 8 version. Different sampling parameters may generate different findings compared with other similar analysis. Analyzed credit data did not contain personal identification information. Metro areas group counties and cities into specific geographic areas for population censuses and compilations of related statistical data.

FICO® is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.