Top States Seeing The Most Credit Limit Decreases

Montana, Washington and Minnesota ranked the highest in a recent report on the states where credit limits decreased the most in the last year.

WalletHub recently released a report on the States Where Credit Limits Decreased the Most for 2024, which compared the average change in credit limit per resident in each of the 50 states between Q2 2023 and Q2 2024, using WalletHub data.

“The average credit limit decreased in 42 of the 50 states year-over-year as of Q2 2024, with the decrease ranging anywhere from around 0.3% to over 15%,” said Chip Lupo, a WalletHub analyst. “A variety of factors can result in credit limit reductions, such as big increases in credit card debt, delinquency on that debt, or a decline in credit score or income. Inflation also plays a role, as it forces people to charge more to their credit cards, raising their credit utilization and putting them more at risk for delinquency.”

States where credit limits decreased the most:

• Montana
• Washington
• Minnesota
• Maryland
• Connecticut

States where credit limits decreased the least:

• Vermont
• South Dakota
• New Mexico
• Iowa
• New Hampshire

Montana

Montana residents saw the largest year-over-year decrease in credit limits, with an average limit drop of around 15% over the 12-month period ending in June 2024. In the second quarter of 2024, credit limits on new cards were over 11% lower than in Q2 2023, marking the 15th-largest decrease nationally. Generally, Montana’s credit limits are below average, with new cards in Q2 2024 averaging $4,794 (20th-lowest in the U.S.) and an overall average of $6,739 for the year (24th-lowest).

Washington

Washington ranks second for credit limit decreases as of Q2 2024. Though the percentage drop was the 19th-highest, Washington’s residents had among the highest initial limits, resulting in significant lost borrowing power. The state is also among the top 15 where credit card debt is increasing the most, which, along with a rise in credit card delinquency, contributes to declining limits.

Minnesota

Minnesota residents faced the third-largest credit limit reductions, with a 9% decrease year-over-year as of June 2024, and a nearly 14% drop on new accounts opened in Q2 2024 compared to Q2 2023. Minnesotans are growing their credit card debt at an above-average rate, though delinquency rates remain low. High incomes in the state suggest credit limits may rebound in the near future.

Read the WalletHub study here.