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When it comes to calculating credit scores, how much a consumer owes on their credit cards is just as important as their total credit limits. Dividing a person's credit card balances by their total credit limits tells you their credit utilization ratio, which is one of the most important factors in calculating a credit score.
Credit utilization factors into credit scores because the higher your utilization, the more risk you pose as a borrower, according to credit scoring models such as FICO. A higher utilization can hurt your credit scores, while a low one—ideally in the single digits—can help improve your scores because it shows you're doing a good job managing your credit and not maxing out all your cards.
As with the amount of debt consumers carry, total credit limits vary by age and location. As part of our ongoing review of consumer credit in the U.S., Experian analyzed consumer credit data from the second quarter (Q2) of 2019 to find out more about which generations and states had the highest average total credit limits. Read on for our insights and analysis.
Baby Boomers Have Highest Average Credit Limits of Any Generation
Baby boomers have the highest average total credit limits of any generation at $39,919 across all credit cards, according to Experian data. This group of 55- to 73-year-olds also boasts the second-highest credit score of any generation, which may indicate that their high total credit limit is contributing to a low utilization ratio.
Generation Z—the youngest generation—has an average total credit limit of $8,062 across all cards. That's nearly one-fourth the amount held by baby boomers. These 18- to 22-year-olds have an average FICO® Score☉ of 667, the lowest of any age group. This low average credit limit and score may mean that the generation's utilization ratios tend to be on the higher side, as they have less overall credit to rely on and even a small balance can drive up their ratio.
| Average Total Credit Limits by Generation | ||
|---|---|---|
| Generation | Average FICO® Score | Average Total Credit Limit Per Consumer |
| Generation Z (18-22) | 667 | $8,062 |
| Millennials (23-38) | 668 | $20,647 |
| Generation X (39-54) | 688 | $33,357 |
| Baby Boomers (55-73) | 731 | $39,919 |
| Silent Generation (74+) | 756 | $32,338 |
*Source: Experian data from Q2 2019
New Jersey Consumers Have Highest Average Total Credit Limits
Consumers in New Jersey topped the charts with the highest average total credit limits. They had $37,845 in credit available to them across all their credit cards, according to Experian data. The state's average FICO® Score was 714, well above the national average of 703.
The District of Columbia, Connecticut, Massachusetts and Colorado followed as the states with the five highest total average credit limits in the U.S.
| Top 10 States With the Highest Average Total Credit Limits | ||
|---|---|---|
| State | Average FICO® Score | Average Total Credit Limit Per Consumer |
| New Jersey | 714 | $37,845 |
| District of Columbia | 703 | $36,351 |
| Connecticut | 717 | $36,272 |
| Massachusetts | 723 | $34,685 |
| Colorado | 718 | $34,061 |
| Virginia | 709 | $34,011 |
| New Hampshire | 724 | $33,666 |
| Maryland | 704 | $33,645 |
| New York | 712 | $33,381 |
| Hawaii | 723 | $33,254 |
*Source: Experian data from Q2 2019
Mississippi Consumers Have Lowest Average FICO Scores and Lowest Total Credit Limits
Mississippi consumers had the lowest total average credit scores in Q2 2019, with $21,676 across all credit cards, according to Experian data. That's 43% less than baby boomers who had the highest total limits and 31% less than the national average total limit which in Q2 2019 was $31,397.
Similar to Generation Z, which had the lowest total credit limits and lowest credit scores, Mississippi had the lowest average FICO® Score of any state in the U.S. This could be attributed, in part, to their low total credit limits and a consumer tendency to overspend on their borrowed revolving debt.
| States With the Lowest Average Total Credit Limits | ||
|---|---|---|
| State | Average FICO® Score | Average Total Credit Limit per Consumer |
| Mississippi | 667 | $21,676 |
| Arkansas | 683 | $24,570 |
| West Virginia | 687 | $24,684 |
| Alabama | 680 | $25,621 |
| Louisiana | 677 | $25,781 |
| Kentucky | 692 | $25,962 |
| Oklahoma | 682 | $26,041 |
| Indiana | 699 | $26,676 |
| Idaho | 711 | $26,871 |
| Iowa | 720 | $27,052 |
*Source: Experian data from Q2 2019
Average Credit Scores Lower in States With Higher Total Credit Limits
Overall, the states with the highest total credit limits had credit scores that were well above average. In the states with the lowest total limits, the opposite was true, and most of the states had FICO Scores that were below the national average.
Consumers' credit utilization ratio counts for 30% of their FICO® Score and typically, with well-managed spending habits, the higher your total credit limit, the lower your utilization. This ratio is the second-most important factor in FICO® Score calculations (next to payment history), so maintaining low utilization can have a great impact on a consumer's credit scores.
Methodology: The analysis results provided are based on an Experian-created statistically relevant aggregate sampling of our consumer credit database that may include use of the FICO® Score 8 version. Different sampling parameters may generate different findings compared with other similar analysis. Analyzed credit data did not contain personal identification information. Metro areas group counties and cities into specific geographic areas for population censuses and compilations of related statistical data.
FICO® is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.