Analysis: How New York Credit Card Holders are Impacted by Interest Rates

A new report from Upgraded Points has been released notes which states would benefit most from credit card interest rate declines, with New York ranking high on that list.

From the beginning of 2022 to the end of 2023, credit card APRs spiked from 16.6% to 22.8%. For credit card users who do not settle their balances in full each month, these elevated interest rates can lead to a rapid compounding of the total amount owed. Nationally, nearly 43% of adults acknowledge occasionally carrying a balance and incurring interest on their credit cards—an audience that stands to gain the most from future interest rate declines that are expected in 2024. However, variations in consumer credit utilization and their propensity to accrue interest mean certain states are experiencing the impact of elevated interest rates more than others.

To determine which states would benefit most from credit card interest rate declines, researchers calculated—by state—the percentage of survey respondents who reported sometimes carrying a credit card balance, and subsequently paying interest.

These are the key takeaways from the report, highlighting some key stats for New York State:

• Total credit card debt in the U.S. surpassed $1 trillion for the first time in 2022, and throughout that year, card issuers levied over $130 billion in interest and fees. This equates to more than $1,000 in credit card interest and fees per U.S. household.
• In New York State, 40.9% of cardholders sometimes carry a balance and pay interest on their credit card.
• Some engage in other costly credit card behaviors as well: 30.9% of New York State cardholders say they sometimes only make the minimum payment, while 19.3% use it for cash advances.
• The states where larger percentages of cardholders sometimes carry a balance and accrue interest are the states whose residents would benefit most from declining interest rates.
• Overall, New York State’s share of cardholders who sometimes carry balances and pay interest on their cards is below the national average of 42.8%.