InDebted Snapshot: Credit card debt by the numbers in South Carolina
This article is part of the series InDebted — South Carolina Public Radio's deep dive into the ecosystem of debt in the Palmetto State.
Credit card debt is piling up. Again. Has been since last year.
Over the course of 2022, post-pandemic wages grew at what, under certain conditions, would be considered a healthy rate – 6 percent or more every month, starting in May, according to the Atlanta Fed.
The problem for Americans earning higher wages was that inflation also spiked last year.
“Over the first seven months of 2022, headline CPI rose at a 9.4% annual rate,” the St. Louis Fed reported last August. Inflation has since mellowed overall, but it nevertheless thwarted the possibilities possible with solid job growth and wage gains in 2022.
And so, Americans are turning to credit cards to help make ends meet, and it’s weighing them down – particularly, according to the New York Fed, younger borrowers. Rates of credit card delinquency among borrowers in their 20s through 40s spiked at the close of Q4 2022. These borrowers, the New York Fed reported, “have surpassed their pre-pandemic rates of delinquency.”
On Feb. 23, the credit bureau Experian reported that while Generation X borrowers continue to have the highest average amount of credit card debt ($8,134), Millennials and Generation Y borrowers saw their average debt amounts grow the fastest since 2020 (23.4 and 25.1 percent, respectively). According to Experian, the average amount of credit card debt increased more than that of any other type of debt in that same time period.
And at the close of 2022, credit card balances "increased by $61 billion to reach $986 billion, surpassing the pre-pandemic high of $927 billion,” according to the New York Fed. Meanwhile, credit card limits have ramped up too – from $3.4 trillion at the end of 2021 to $4.4 trillion at the end of 2022.
The Fed did not break out South Carolina data in this report. But where does the Palmetto State fit into all of this?
Well, 2022 numbers from the Urban Institute place South Carolina seventh among states for overall shares of residents – 4.5 percent – whose credit cards accounts are delinquent or derogatory (delinquent meaning there has been no payment on the account for at least 90 days; derogatory meaning an account is seen as negative by a lender because of late payments or other hiccups in paying).
That averaged-out share, however, belies a large gulf between white credit card holders and borrowers of color. Overall in South Carolina, Urban Institute’s data show 3.6 percent of white credit card borrowers with delinquent or derogatory debt and 8.2 percent in communities of color.
Broken down by county, 30 of South Carolina’s 46 counties have a higher-than-state-average share of residents overall with delinquent or derogatory credit card accounts. Lee County has the highest share of any county in the state, at nearly 12 percent. Bamberg and Hampton counties are hovering close to 10 percent.
In the 20 counties that measure delinquent and derogatory debt among communities of color in South Carolina’s counties, all but two – Darlington and Jasper – have higher-than-the-overall-state-average (4.5 percent) shares of non-white residents with credit card debt in trouble. Meanwhile, 13 of 32 counties that measure white residents’ shares of these debts show shares higher than the state average.
In the U.S., CreditCards.com reported last September that 60 percent of credit card borrowers had owed their credit card lenders for at least 12 months on their balances.
On Feb. 7, the Federal Reserve reported that the average interest rate on credit cards in the U.S. closed 2022 at 20.4 percent – the highest average rate in 30 years.