SIOUX FALLS, S.D. (KELO) — Multiple analysts and data show the average and median credit card debt in South Dakota is increasing.
That debt, along with any mortgage, car loans, student loans and other debt can contribute to a more unfavorable debt-to-income ratio in the state.
Economists vary on the consequences of increased credit card debt with some saying it increases financial stress on households, especially lower income households and will slow the economy as people may buy fewer products. Economists may acknowledge the impact on household finances but also say the overall economy won’t be too adversely hindered.
A key piece is delinquency. The Federal Reserve of New York said on Nov. 7 there was a 3% increase in credit card debt in some state of delinquency at the end of September.
A Nov. 7 report by LendingTree, an online lending firm, said the average credit card in South Dakota was $6,367. The number is for the third quarter of 2023.
The state’s average credit card debt in the third quarter of 2022 was $5,071, according to Capitol One. That would be roughly one year ago.
Annuity used 2022 data to determine the average credit debt in the state was $5,235. Annuity released the credit card data on Sept. 11.
A study by Wallethub looked at the median credit card debt in the state. The median is the middle and half of the debt is lower than the median and half of the debt is more than the median. The median debt was $2,338, according to that July 25 report.
South Dakota’s credit card debt is increasing but when it comes to rankings, it’s still ranks roughly in the mid-30s in credit card debt, according to several rankings.
Forbes Advisor listed the top credit card debt in 2022 was $6,787 in Alaska. That information was released in March 2023. The lowest average $5,915 in Colorado. Alaska’s debt dropping slightly to $6,367 in 2023, according to LendingTree. Connecticut took the top sport in LendingTree’s list at $9,408. This study ranked South Dakota’s debt at 39th.
Moneywise listed the per-person credit card debt at $2,960. Per person is specific and does not include household credit card debt. It ranked the state 36th in debt among all states.
Credit card debt is growing but slower than the pace of many other states. What does the overall household debt look like in the state?
Total household debt rose by 1.3% to reach $17.29 trillion in the third quarter of 2023, the Federal Reserve of New York said. “Credit card balances increased by $48 billion to $1.08 trillion in Q3 2023, representing a 4.7% quarterly increase. Auto loan balances rose by $13 billion, consistent with the upward trajectory seen since 2011, and now stand at $1.6 trillion,” the federal reserve said on Nov. 7.
The average mortgage balance in South Dakota in 2022 was $180,270, according to Experian.
Business Insider broke down debt as per person to $5,150 in auto debt, $2,960 in credit card debt and $32,740 in mortgage debt.
Housing costs contribute to overall debt and while home prices in South Dakota have increased greatly over the past several years, the cost is still lower than in many states. It’s one reason why the state’s overall debt average is lower than in other states.
Bank Rate said the median price of a home in South Dakota is $332,000. Data from the Federal Reserve in St. Louis and Realtor.com also show the price of house is increasing in South Dakota.
The average price of a house in the U.S. in 2023 is $513,400, according to the Federal Reserve of St. Louis.
As house prices and credit card debt increase, how far does money go in South Dakota?
The state’s Bureau of Finance Management discussed on Oct. 25, how sales tax revenue was growing faster than personal income. Officials discussed how COVID-19 stimulus money helped to increase purchases and therefore, sales tax revenue.
The Federal Reserve lists the income to debt ratio as 1.227 for 2023. Statista listed the same ratio for 2022. The 1.227 rate means household debt is larger than income. A ratio of less than one shows the debt is smaller than the household income.
Take New York as an example from Expedian. The debt to income ratio is 1.12. The average personal debt is $87,353 while the average personal income is $78,252. So, the person has about $9,000 more in personal debt than personal income.
As credit card debt increases there are anecdotal, yet data-based, examples that inflation is likely causing some financial difficulties for South Dakota residents.
The Sioux Falls School District reported that nearly 50% of its students this year qualify for free and reduced meals or were of a lower income.
Feeding South Dakota reported feeding 900 more families in October than in September.
The Helpline Center said that 79% of recent calls have been about food pantries.