Regional Economic Divides Visible in Credit Card Payment Data
Credit card delinquency rates in the U.S. show dramatic regional variation, with Mississippi recording the highest rate at 37% and Florida the lowest at 13.99%. These figures represent the share of credit card accounts that became 30 or more days past due from Q1 to Q2 2025. The Deep South dominates the high end of the spectrum, with Louisiana at 32% and Alabama at 31%, while Iowa follows Florida closely at 14.36%.
The geographic pattern is stark and consistent. Southern states including Arkansas, Oklahoma, Tennessee, and South Carolina all exceed 25% delinquency rates. The Midwest and parts of the West show substantially lower stress, with most states between 15% and 21%. California, Washington, Utah, and Hawaii cluster around 15%, suggesting relatively stable consumer finances despite high living costs. The data comes from WalletHub's analysis of Q2 2025 payment patterns.
Mississippi's position at the top is particularly notable given that the state has among the lowest average credit card balances at just over $19,000, indicating tighter credit availability. This inverse relationship between credit access and delinquency demonstrates that restricted credit limits don't prevent payment problems when underlying economic conditions are weak. The 2.6x variation between the highest and lowest state delinquency rates reveals economic stress patterns that national averages obscure.
Read the full Visual Capitalist analysis of state credit card delinquency rates
Commentary
Regional Economic Fundamentals Drive Delinquency: The geographic concentration of high delinquency rates in the Deep South reflects structural economic conditions including lower median incomes, employment concentrated in sectors with greater volatility (agriculture, low-wage manufacturing, service industries), and weaker social safety nets. These aren't temporary cyclical factors but persistent regional economic characteristics that compound during periods of inflation or rising interest rates.
The Credit Access Paradox: Mississippi has both the highest delinquency rate and among the lowest average credit limits. This might seem contradictory, but it reflects lenders' risk-based pricing and credit allocation. Residents in higher-risk states receive less credit access, yet still struggle with payments because the fundamental issue is income insufficiency rather than over-borrowing. Restricting credit doesn't solve the underlying problem; it just limits the available cushion when financial stress occurs.
Florida's Outlier Status: Florida's position as the lowest delinquency state despite being a high-cost-of-living area with significant retiree and working-class populations is notable. Several factors may contribute: no state income tax improving disposable income, strong recent in-migration of higher-income workers, diverse economy spanning tourism, aerospace, logistics, and finance, and a cultural emphasis on fiscal responsibility that WalletHub analysts have noted. Florida also had the smallest increase in delinquency during the period at 14.8%, suggesting sustained stability.
Post-Inflation Consumer Stress: These 2025 delinquency figures reflect the lagging effects of 2021-2023 inflation. While headline inflation has moderated, the cumulative impact on household budgets persists. Pandemic savings have been depleted (down approximately 40% according to Federal Reserve data), and real wage growth hasn't fully compensated for price level increases. Credit cards increasingly serve as income supplements rather than payment convenience, particularly in regions where wage growth has lagged.
The Manufacturing Belt Challenge: Midwestern states show moderate delinquency rates (Ohio at 21%, Indiana at 20%) reflecting stress in manufacturing-dependent economies. Auto plant slowdowns and broader manufacturing sector adjustments create pockets of financial pressure. However, these rates remain well below Southern states, partly due to union wage protections and higher median incomes that provide greater financial buffers.
Demographic Factors: Baby boomer retirement patterns may partially explain Florida's strong performance, as retirees often have paid-off mortgages, Medicare reducing healthcare costs, and fixed incomes that weren't subject to inflation in the same way wages experienced purchasing power erosion. Conversely, states with younger populations carrying student debt alongside credit card balances face compounded payment obligations.
National Averages as Poor Proxies: The often-cited national credit card delinquency rate around 3% is meaningless for understanding regional conditions. A business, lender, or policymaker using national figures would dramatically misunderstand the financial stress in Mississippi (12x the national average) while potentially over-estimating risk in Florida (roughly half the national average). State-level and even county-level data is essential for accurate risk assessment.
Interest Rate Environment: Rising interest rates from 2022-2023 hit credit card borrowers particularly hard since most credit card debt is variable-rate. A cardholder with a $9,000 balance at 20% APR pays $1,800 annually in interest alone. In states with high delinquency, this represents a significant portion of median household income, making it mathematically difficult to pay down principal while covering interest charges.
The Collection Industry Impact: States with delinquency rates above 30% see substantially higher collection activity, which itself creates additional financial stress through garnishments, credit score damage preventing access to lower-cost credit, and psychological pressure affecting overall financial decision-making. This creates negative feedback loops where initial payment difficulties cascade into broader financial instability.