As of the fourth quarter of 2017, total student loan debt in the U.S. hit a record high of $1.38 trillion, up 152% over the past 10 years. For reference, total household debt only grew 6% over that same time period, according to data from The New York Fed. Outside of mortgages, student loans are now the largest source of household debt for Americans, greater than auto loans ($1.22 trillion) or credit cards ($834 billion).
At an aggregate level, it’s clear that more education leads to lower unemployment and higher earnings. However, decisions after graduation regarding occupation, industry, and location, among others, can have big impacts on the return-on-investment of a given degree. This is why, despite the benefits that a bachelor’s or advanced degree might offer in the workplace at a national-level, many individuals in the U.S. are currently unable to meet their student loan debt obligations. According to The New York Fed, 9.2% of student loans are currently 90+ days delinquent or in default, but the results vary widely by state. In Mississippi, that number is close to 17%, whereas in Massachusetts, it’s just under 7.5%.


To see just how much student loan debt varies by location, researchers at Credit Sesame analyzed debt statistics from The New York Fed and demographic and earnings data from the American Community Survey. Rather than looking just at total (or per-capita) student loan debt balances by state, Credit Sesame calculated debt-to-earnings ratios (debt as a percentage of earnings) for college graduates. States with low debt-to-earnings ratios have lower student loan debt burdens than those with high debt-to-earnings ratios. Here are the states with the most (and least) student loan debt.


MethodologyDebt statistics used in this analysis were sourced from the 4Q17 Federal Reserve Bank of New York, State-Level Household Debt Statistics dataset. Educational attainment and earnings data were sourced from the 2016 American Community Survey (ACS) 1-Year Estimates, Educational Attainment file. For each state, the Average debt for graduates was calculated by dividing the Student loan debt balance per capita (New York Fed) by the Percent of population w/ a bachelor’s degree or higher (ACS). The Debt-to-earnings ratio for graduates was calculated by dividing the Average debt for graduates (calculated above) by the Median annual earnings for bachelor’s degree holders (ACS). The resulting statistic was used to rank states, with higher debt-to-income ratios corresponding to more debt. Percent of of loans delinquent/in default was also sourced from the New York Fed, and includes student loan debt balance that is 90+ days delinquent and in default.

You open your statement and discover you’re late on your credit card payment. Or you get a call from a collection agency about a medical bill you forgot to pay. Or you check your credit reports and discover a late payment is marring your otherwise perfect payment history.
What happens if you miss a credit card payment? How do late payments affect your credit scores? Of course, as with so many things related to credit scores, the answer is, “It depends.”
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Hope for the BestLate payments and good credit scores go together like toothpaste and orange juice—they don’t mix. But just how bad is it to miss a single payment?
First, it depends on how many days late your payment is. If you missed your credit card payment by one day, you probably don’t need to sweat it.
If you’re lucky, the lender won’t report the lapse. “Most lenders do not report missed payments until the account is 30-plus days past due,” says Anthony Sprauve, PR director for MyFico.com.
“Suppose a given credit card payment is due on May 15 [and you pay on] May 25. Technically, the payment is late, and fees and interest charges may apply. But in most cases, this late payment would not be reported by the creditor to the credit reporting agencies [CRAs].”
Or perhaps your lender may overlook the transgression. Steve Ely, president of eCredable.com, adds, “The larger creditors [like credit card companies] usually have sophisticated analytic models working behind the scenes that take into account your history of payments. If you’ve been paying on time for a long time, they’re likely to forgive your one late payment and let it slide.”
But Brace for the WorstWhat if you don’t luck out and the creditor reports the late payment? Here are three questions that will help you understand the possible impact, according to Barry Paperno, community director for Credit.com:

1. How long ago did the most recent late payment occur?
2. How severe were the late payments (30 days, 60 days, charged off, etc.)?
3. How many accounts on the credit report have had late payments?

“Of these three questions, the one typically having the most impact on your credit score is the first: recency,” says Paperno. “To illustrate, if a single late credit payment occurred a few years ago and all payments on all accounts have been made on time since, that single late payment will have little negative impact on your score.”
How Bad Can It Get?To put the potential consequences in perspective, Paperno points to a study about credit scoring effects conducted by FICO that points to a scary possibility. “[A] recent late payment can cause as much as a 90- to 110-point drop on a FICO score of 780 or higher.”
Although score drops from late payments tend to rise again over time, these credit dings can remain on your credit report for seven years, according to Paperno. You can expect the effects to last for much of that time.
Sprauve also explains that the impact of a missed credit card payment or late bill on your FICO credit score varies significantly depending upon the individual consumer’s circumstances. He details some of the factors that can help determine how much a late payment will hurt your scores:

• Any history of account delinquencies or collection references (on any account)
• Any adverse legal items on your credit report
• The outstanding balance on the delinquent account
• The number of other accounts on the file that you’ve currently paid as agreed
• The length of your credit history

The Bigger They Are, the Harder They FallThe irony is, the better your credit, the more you may feel the sting. One slipup and your credit score may take a dive—even if you have otherwise stellar credit.
“The old [adage] of ‘the bigger they are, the harder they fall’ applies to credit scores too,” warns Ely. “If you have a really high FICO Score, you’ll take a bigger hit for a late payment than someone with a lower FICO Score.”
The best defense is to be meticulous about paying your bills by the due date. But if you do mess up, see if you can’t convince the lender or collector to remove the ding from your reports. While they may balk at first, you may be able to persuade them to change their mind if you have a good explanation—and they believe you when say it won’t happen again.
What You Can DoIf you’re concerned about how late payments could be damaging your credit, you can check your three credit reports for free once a year from each of the reporting agencies. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get two free credit scores updated each month.
Tips to Make Sure You Don’t Miss PaymentsIf you want to find ways to help avoid making late payments or missing them altogether, here are a few tips and tricks to keep in mind:
Sign up for Auto PayAuto pay can be extremely beneficial for those that find themselves forgetting to make their bill payments on time. Auto pay is simply when you authorize the credit issuer or lenders to automatically deduct your monthly payment amount directly from your checking account on the due date.
Even with auto pay, it is still recommended that you pay more than just the minimum amount that is due on your credit accounts, so you can avoid pay higher interest rates because of the balances you may carry from month to month. Doing so will also positively affect your credit standing.
A downfall to auto pay, however, is that you have to be sure that you have the funds available in your account prior to the date the funds are to be withdrawn. If you don’t have enough to cover the payment, then you may experience fees in addition to the missed monthly payment.
Set Up RemindersAnother way you can effectively pay your bills on time to help you credit history and credit scores is to set up payment reminders instead of relying on your memory.
Calendar and online reminders on a phone or other mobile device are probably the most popular ways to keep track of what you have to pay and when it needs to be paid. You can also ask the creditor to provide you with online alerts when your payments are coming due.
Weekly PaymentsWhile most account payments are due once per month, it may be in your best interest to instead pay weekly on the account. By doing so, you may find that it is easier to control your overall balances and it will help you pay everything off a bit faster.
However, if you cannot afford to make payments weekly, then you should instead consider one of the other options we have already mentioned.


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​When people talk (or write) about credit and credit cards, we often hear different terms being tossed around as though we’re supposed to understand what they mean. Some are easy to comprehend while others, well, they’re not so easy. And there are others we might think we understand but, when it comes down to it, we’re actually mistaken about their true meaning. So do you know these common credit card terms?
What follows are 5 credit card terms that will probably sound familiar. However, you might be surprised that they mean something totally different than what you originally may have thought.
1. APR and APYThere’s only a one letter difference between these two abbreviations, but their definitions couldn’t be further apart.
APR (Annual Percentage Rate) is money you pay. APR is the annual percentage rate a lender charges when you borrow money. APR is typically used for credit cards, mortgages and loans.
APY (Annual Percentage Yield) is money you make. APY is the rate of return on an interest rate and includes compound interest – the interest you earn on top of the principal and simple interest. It’s more commonly used for interest-bearing accounts like savings bank accounts and investments.
When making an investment (or opening a savings account) or applying for a credit card, take careful note of APR and APY. It could make thousands of dollars of difference in your income and your interest payments.
2. Annual FeeMany credit cards charge an annual fee for the “privilege” of using their card. Often using the term “Membership Fee” or “Participation Fee”, the lender can charge anywhere from $10 to $350 or more. This fee is often related to the type of “rewards” you can get by using the card and getting “points”. You can then redeem those points to enjoy discounts on everything from travel and retail shopping to restaurants and gift cards. Carefully consider risk vs. reward before deciding to pay an annual fee. Will your rewards outweigh your fee? If not, consider finding a card with no annual fee at all.
3. Minimum PaymentCredit cards, like most loans, require a minimum amount to be paid each month in order to keep that account from going into default. With credit cards, the minimum payments typically equal 2% of the outstanding balance. Always pay this minimum amount in order to keep the payment history factor of your FICO® Score in good standing. If possible, pay more than the minimum payment each month so you can reduce the debt faster.
4. Finance ChargesThese are two words no one likes to hear. We might not know exactly what they are, but we know they’re not a good thing. Most credit cards give you a certain amount of time to pay off your balance in full before charging a penalty (this timeframe is known as a “grace period”). The penalty, typically in the form of a finance charge, is an interest fee charged on the money you’ve borrowed.
A finance charge is usually imposed when

1. A transaction is made without a 0% interest promotion in effect
2. There’s a balance due at the beginning of a billing cycle
3. The transaction isn’t offered a grace period (i.e. cash advance)

It pretty much goes without saying that the best way to not pay a finance charge is to pay your entire balance down each month.
5. Credit LimitThis term pretty much means exactly what it sounds like: it’s the maximum outstanding balance you can have on your credit card at any point in time without getting charged a penalty (typically a higher rate than your current rate). You can learn what your credit limit is by checking your credit card agreement, your billing statement or simply by calling your credit card’s customer service line.
When you near your credit limit or exceed it, your credit score could be negatively impacted. This is due to credit utilization – the FICO® Score factor that measures the amount of your total credit being used and accounts for 30% of your credit score. The higher your credit card balance in relation to your credit limit, the higher your credit utilization and impact on your credit score. That’s why it’s so important to know your credit limit before making too many purchases!