Total overall debt was up 9% in the third quarter of 2020 compared with the same period in 2019 among Credit Karma members, but average credit card debt was down nearly 4% year-over-year.

Those are some of the main takeaways from Credit Karma’s latest quarterly State of Credit and Debt Report, an analysis of aggregated Credit Karma debt and credit data that keeps a pulse on the state of credit and debt around the country. (Learn more about our methodology.)

For this latest edition of the report, we looked at data from July through September 2020 and compared it with the same period in 2019 to determine year-over-year changes related to overall debt and demand for credit.

Read on for more, including data and analysis by generation and geography.

Credit Karma Stat Snapshot

Debt spotlight

• Credit card
• Auto
• Mortgage
• Student loan

Credit demand trends

Tips for improving credit health

Credit Karma stat snapshot

Among Credit Karma members …

Overall

Generations

Geography

Debt spotlight

In the third quarter of 2020, average total overall debt among Credit Karma members was $75,898. That’s a 9% increase compared to the same period in 2019, when average total debt was $69,936.

The graphic below shows the percentage increase in members’ average total overall debt by state in the past year. States with the highest debt increases — led by Alaska and Utah (both 9%) — are shaded darkest.

States with the least increase in debt included New York, New Jersey, Rhode Island and Connecticut (all 2%).

Credit card debt

Average total credit card debt among Credit Karma members was down nearly 4% year-over-year in the third quarter of 2020.

• Credit Karma members in some cities made significant strides in lowering their average credit card debt, while members in other cities increased their credit card debt, our data showed.

• Credit Karma’s Gen Z members had the least credit card debt among all generations in the third quarter of 2020. Baby boomers had the most, with Gen X not far behind.
  
• Millennials reduced their average total credit card debt more than other generations in the third quarter of 2020 compared with the same period a year earlier, seeing a reduction in average total credit card debt of a little over 5%.

Based on Credit Karma members with credit card debt in Q3 2020.

Auto loan debt

Average total auto loan debt was up almost 4% among Credit Karma members in the third quarter of 2020 compared with the third quarter of 2019.

• Auto loan debt is highest for those with fair — but not great — credit scores. Our analysis found that Credit Karma members with average VantageScore 3.0® credit scores from 660 to 719, which are considered within the fair to low end of the good ranges, carried the highest average auto loan debt at $23,008 in the third quarter of 2020.

• Gen Zers saw the biggest rise in auto loan debt, but Gen X pays the most. Gen Z members saw their average total auto loan debt rise the most of any generation, up nearly 7% in the third quarter of 2020 compared with the year-ago period. However, Gen X members had the highest average auto loan debt at $23,622.

Mortgage debt

Average mortgage debt among Credit Karma members was more than 7% higher in the third quarter of 2020 compared with the same period a year ago.

• Credit Karma members in Hawaii had the highest average open mortgage balance in the third quarter of 2020 at $384,520. California was close behind and is home to the city with the highest average open mortgage balance, San Francisco, at $636,864. The city with the lowest average open mortgage balance was New Orleans, at $106,868.

For a look at cities with the highest average monthly mortgage payments in the third quarter, take a look at the graphic below.

• There are signals the youngest generations — millennials and Gen Zers — are getting into the housing market. The average open mortgage debt for millennials in the third quarter of 2020 was $216,404. Meanwhile, Gen Z members saw their average mortgage debt rise nearly 11% in the third quarter of 2020 to $161,884 compared to $150,840 in the same period last year.

Student loan debt

Average total student loan debt among Credit Karma members was up almost 8% in the third quarter of this year compared to the same period a year earlier. Keep in mind that from March 13, 2020, through Sept. 30, 2020, the interest rate for federally owned loans was set to 0%, and mandatory payments for these loans were suspended.

Under the CARES Act, all principal and interest payments on federally held student loans was automatically suspended through Sept. 30, 2020. An executive action by President Donald Trump extended that time frame to Dec. 31, 2020.

Privately owned student loans lenders were not required to suspend the accrual of interest or the collection of payments. The data below reflects debt reported to TransUnion as student loan debt and may include data for both private and federal student loans.

• Gen X had the most student loan debt. Our data shows that Gen X members had more than three times as much student loan debt on average as Gen Z members in the third quarter of 2020.

• Average student loan balances were highest for Credit Karma members in Maryland and lowest in Utah. The average student loan payment was highest in Maryland at $47,363 and lowest in Utah at $31,646.

Credit demand trends

The number of average credit inquiries across all Credit Karma members was steady in the third quarter of 2020 compared with the year-ago period, indicating about the same level of demand for credit year-over-year.

• Gen X and millennial Credit Karma members had the most credit inquiries on average, with six — while members of the silent and greatest generations had four inquiries on average.
  
• The number of inquiries also varied by city. San Francisco-area Credit Karma members had an average of three inquiries on their reports in the third quarter, well below the average of five. On the other hand, Credit Karma members had an average of eight inquiries in Indianapolis, Indiana; Aurora, Colorado; Arlington, Texas; Portland, Oregon; and Norfolk, Virginia.

Tips for improving credit health

Our latest data report shows that Credit Karma members in general have been making strides in paying down their credit card debt, which is something that can help your overall credit health. If you’re still working on the path toward credit improvement, take heart: It’s possible to improve your credit once you understand how it works — and then use it carefully and strategically. We’ve got some tips to help.

Understand what factors affect your credit scores

Your payment history, or how often you’ve made on-time payments, is one of the most important factors in determining your credit scores. That’s why it’s so important to pay at least the minimum balance on your bills on time.

Your scores are also affected by factors like credit utilization (how much of your available credit you’re using), your length of credit history and more. If you have an account in collections or an overdue account, you’re not alone — but keep in mind that they can affect your credit scores.

Understand how to use good credit to your advantage

Generally, when you have a better credit profile, it may be easier to qualify to borrow the money you need — and at a lower cost — than if you have credit that’s not as strong.

For example, Credit Karma members with good credit scores in the third quarter of 2020 had the most auto loan debt. This might be because they were able to borrow enough to afford the vehicles they wanted.

Borrow only what you need

Taking on additional debt that you don’t pay off right away could cause your credit scores to drop, since utilization is a key factor in credit scores. It’s generally considered a good rule of thumb to make sure you’re using under 30% of the total credit you’re borrowing.

Although Credit Karma member debt overall was up 9% from in the third quarter of 2020 compared with the same period a year ago, average credit scores increased among members. One reason might be that credit utilization ratios weren’t dramatically affected.

Be picky about the types of debt you do take on

Some types of debt are considered better than others. Mortgages or student loans may cost more upfront but are considered to be good debt because they may lead to longer-term financial gains.

Credit card debt might not cost as much upfront, but it doesn’t leave you with appreciating assets — so it’s considered bad debt.

Keeping your “bad debt” as close to zero as possible can help strengthen your credit profile.

Methodology

To determine averages across overall debt (including but not limited to credit card, mortgage, personal loan, student loan and auto loan debt) and credit-seeking trends in the third quarter of 2020 (July to September), we analyzed the data of more than 80 million U.S. Credit Karma members in aggregate. All aggregate data analyzed came from members’ TransUnion credit reports. For the purpose of this analysis, card debt is defined as any unpaid balances existing on members’ credit cards or credit card statements at the time the data was pulled. We also looked at aggregate data of more than 22 million U.S. members with ZIP codes in the top 100 most-populated U.S. metro areas to see trends by geography. All numbers in this report were rounded to the nearest whole.

Let’s face it — voting in the presidential election is different this year than it’s been in elections past. What’s more, misinformation about voting — including the notion that widespread fraud exists — is widely spread online. If you’re struggling to separate fact from fiction, here’s the truth behind six common election fraud myths.

• Myth 1: It’s easy to cheat the system and vote more than once.
• Myth 2: Absentee ballots create an opportunity for voter fraud.
• Myth 3: Fraudsters vote as dead people all the time.
• Myth 4: If the polling place closes while you’re in line, you won’t be able to vote.
• Myth 5: Everyone is required to show ID to prevent voter fraud.
• Myth 6: Election results changing are a sign voter fraud has happened.
• What’s next: Make sure you’re registered to vote and make a plan to vote

Myth 1: It’s easy to cheat the system and vote more than once.

No system is 100% cheat-proof. But states do a lot to ensure we have fair elections, that only eligible voters vote, and that people don’t vote more than once in a federal, state or local election, including in a primary election. Some measures (there are others) include the following:

• Cross-checking new registration applications against existing databases, such as the state’s department of motor vehicles list and the U.S. Postal Service’s National Change of Address files.
• Assigning each voter a designated polling place. Your polling place will have your name on its list. Your name should only appear on the list at this polling place. Generally, your polling place would change only if you move to a new address. But you should be aware that the site of your polling place could change from one election to the next. This year, changes in polling places are possible because of the coronavirus.
• Using election management systems that allow only one ballot to be associated with a voter, which helps prevent voters from casting multiple ballots.
• Comparing voter signatures for both in-person and mail-in voting.

Each state has its own laws on double voting. In North Carolina, for example, it’s a felony to vote more than once in an election, while Indiana considers this a misdemeanor. If you’re curious about the regulations in your state, the National Council of State Legislatures has more information here. 

Myth 2: Absentee ballots create an opportunity for voter fraud.

Absentee voting is common and has a long-standing history in the U.S. It began as a means for soldiers to vote during the Civil War. Today, the requirements to vote absentee mean you must be registered to vote in order to request a ballot. And, as we said earlier, states take multiple steps to ensure that people who register to vote are eligible to vote.

As when you vote in person, voting absentee generally requires some type of proof of identity when you submit your absentee ballot. Although specific regulations vary by state, all states take steps to make sure absentee ballots are legitimate before being counted. Actions may include such things as checking to make sure the signature on a mail-in ballot matches the signature on voter lists.

Myth 3: Fraudsters vote as dead people all the time.

You might think fraudsters could easily steal Social Security numbers or other personal data from dead people and impersonate them in order to vote. But such cases of voter fraud are rare.

Each state maintains and regularly updates lists of all registered voters as part of its process to ensure the integrity of our elections, according to the National Conference of State Legislatures, or NCLS. People who are no longer eligible to vote are regularly removed from the list — including those voters who’ve passed away. State officials track which voters have died by keeping tabs on data from their state’s department of vital statistics, department of health or other state agencies that handle death records.

In addition, states generally require a voter’s signature in order to vote. County election officials compare these signatures with past signatures on file to check for fraud.

Myth 4: If the polling place closes while you’re in line, you won’t be able to vote.

Lines at polls may be long on Election Day. If you’re in line to vote by the time the polling place closes, you have the right to cast your vote. Stay in line, no matter what someone might tell you, and exercise your right to vote. If you run into any problems with someone telling you to leave your polling line or blocking your attempt to vote at your polling location, you can call one of the hotlines organized by the national, nonpartisan Election Protection coalition:

• 866-OUR-VOTE for English
• 888-VE-Y-VOTA for Spanish
• 844-YALLA-US for Arabic/English
• 888-API-VOTE for Asian Languages/English

Myth 5: Everyone is required to show ID to prevent voter fraud.

Some states require a state-issued ID card with a photo in order to vote in person, but others do not. It’s important to know your state’s ID requirements, which you can check through Credit Karma’s Voter Roadmap or through information on the NCSL website.

If you want to play it safe, you can go to the polls with your ID card and a voter registration card if you have one. But if you don’t have proper ID at the polling place, you should be allowed to cast a provisional ballot that will be counted so long as you show proof of ID by a certain deadline after Election Day. Again, requirements vary by state, so be sure to know your state’s requirements before you vote.

Myth 6: Election results changing are a sign voter fraud has happened.

Election Night 2020 is likely to be a wild ride as various media outlets scramble to report popular vote counts and predict electoral votes across the U.S. Despite the myth that voter fraud makes election results change as votes are counted, there are legitimate reasons why election results may change, including these three:

• The ballot certification process: Every county in every state must meticulously certify all the ballots it counts, a process that can take days or weeks. During the certification process, vote totals can change.
• Absentee ballot counts before Election Day: Initial results from mail ballots counted ahead of Election Day could change as live voting results are added throughout election night.
• Ballots from voters who register at the polls on Election Day: In some states, you can register to vote at your polling place on Election Day. These ballots aren’t counted until after Election Day and may affect vote totals.

What’s next: Make sure you’re registered and make a plan to vote

Navigating all the paperwork and various local regulations that come with voting can be challenging. But armed with knowledge about your voting rights, how the electoral process works and what officials do to maintain election integrity means you’ll be able to vote with confidence on Election Day 2020 and beyond.

Here’s how to get started:

• Check to make sure you’re registered to vote through our Voter Roadmap.
• If you’re not registered to vote, do so immediately.
• Once you’re registered, decide how you’ll vote: absentee, via in-person early voting, or in person on Election Day.
• Know what’s required to vote in your state using the method you’ve chosen — mail voting or in-person voting.

Americans’ financial situations could play a big role in deciding if — and how — they vote in this year’s presidential election, a new Credit Karma survey finds.

In a nationally representative survey of 1,045 U.S. adults, we found that more than 60% of Americans who are planning to vote in November believe their vote will have a direct impact on their future financial stability (61%). And one-quarter of those planning to cast a ballot say they’ll actually change the way they typically vote because of their financial situation (25%).

What’s more, a majority of voters from our survey said economic recovery will be the top issue for them at the polls — beating out other hot-button issues like healthcare reform and immigration. And nearly 2 in 5 voters (38%) say their finances are the primary reason they’re voting this year. (Learn about our methodology.)

At Credit Karma, we believe in financial progress for all — and voting can be a key to empowering financial progress. Read on to learn more about how Americans are thinking about their finances and the election season, then get tips to help you exercise your right to vote.

Key survey findings

Why will finances take center stage for many voters in November?

In our survey, we asked respondents to name the issues they most care about in the upcoming election. Five of the top 10 issues were related to finance:

1. Economic recovery (56%)
2. Healthcare reform (45%)
3. Racial justice (38%)
4. Human rights (35%)
5. Taxes (34%)
6. Stimulus program (30%)
7. Immigration (29%)
8. Income inequality/minimum wage (29%)
9. Climate change or other conservation efforts (29%)
10. Cost of education/student debt (19%)

Money-related issues are clearly top of mind for voters this election season. But why?

Our survey results suggest it could be due to the increased financial strain that Americans are feeling because of COVID-19 and the resulting economic downturn.

In fact, our survey found that more than one-third of respondents (36%) have seen their finances worsen since the beginning of the pandemic. And 4 in 5 respondents who plan to vote (80%) say the current economic downturn has made them realize the importance of their vote.

Which type of elections have the biggest impact on personal finances, according to Americans?

Over 60% of voters from our survey say their vote in November will have a direct impact on their future financial stability. Meanwhile, over half (58%) of respondents planning to vote agree with the following statement: “The politicians and policies I vote for have a direct impact on my personal finances.” 

But which elections do Americans perceive as having the biggest and most direct impact on their financial situations? Our survey found:

• Most respondents (60%) think federal elections have the most direct effect on their finances
• 23% of respondents think state elections have the most direct effect on their finances
• 17% of those we surveyed think local elections have the most direct impact on their financial situation

With a presidential election in November, it follows that financially minded voters may be more engaged this election season.

However, the notion that a federal election would have a more direct impact on your financial situation isn’t necessarily true. If you’re a registered voter who cares how politics affects your money, it’s important to vote at all levels of government. State and local leaders can determine laws and policies that are more likely to affect your immediate situation and surroundings — issues like rent, city and state taxes, tax-funded projects and more.

How finances could change the way Americans vote

One-quarter (25%) of Americans from our survey who plan to vote say they’ll change the way they typically vote this election because of their current financial situation. Of these voters:

• Over a quarter (27%) say they’ll primarily vote for politicians in the opposite party for which they’re registered
• Nearly two-fifths (38%) say they’ll do more research for their local elections
• Others say they’ll vote for politicians who support policies they don’t usually support (7%), while some say they’ll actually do less research for their local elections (3%)

Tips to help you exercise your right to vote

Here at Credit Karma, we agree that this election and future elections can have a real impact on your finances — and we believe that voting can be key to unlocking financial progress. So, no matter your financial situation, political preference or location, it’s important that you make your voice heard in your federal, state and local elections.

Here’s some advice to make sure you, your friends and your family are ready to get out and vote this November.

• Make sure you’re registered to vote. Do you know the requirements to vote in the U.S. and if you’re registered to vote? Even if you think you are registered, it’s a good idea to double check. You can do this through the Credit Karma app with our Voter Roadmap.

• Make sure you have a voting plan. Once you’ve checked your voter status and are registered to vote, check your Voter Roadmap in the Credit Karma app to learn key deadlines for requesting a mail-in ballot to vote absentee. Or, if you prefer to vote in person, find your polling place for early voting or for casting a ballot on Election Day.

• Make sure you’re informed on issues that matter to you. If you’re in agreement with the 56% of voters in our survey who cited economic recovery as their top issue this season, make sure you read up on candidates’ plans to boost the economy. The same goes for other issues. Being informed can help you feel empowered when it comes time to vote.

• Get out the vote. This election season is different because of the pandemic — but that doesn’t mean you can’t vote or help others to cast a ballot. Pledge to help three friends vote this election season.

Methodology

On behalf of Credit Karma, Qualtrics conducted a nationally representative online survey in September 2020 among 1,045 U.S. adults (946 of which are currently registered to vote, or plan on registering to vote) to better understand Americans’ thoughts on voting this election year. Of the 1,045 respondents in our survey, 946 plan to cast a ballot in the upcoming election and are considered voters.

Safety concerns may have you wondering if you can vote by mail in the November 2020 general election. The answer is mostly “yes” — depending on what state you live in.

Election Day is Tuesday, Nov. 3, 2020, across the U.S. This year you can cast your vote for president as well as other federal, state and local offices.

It’s important to note that if you want to vote by mail in this year’s general election rather than in person on or before Election Day, you’ll need to follow your state and local guidelines for requesting an absentee ballot — including requesting it by the deadline and returning it on time. To help ensure your vote gets counted, it’s a good idea to return your absentee ballot well before the actual deadline.

• What is vote by mail?
• Can I vote by mail?
• How do I vote by mail?
• What’s the deadline to return an absentee ballot?
• Can I track my vote by mail ballot?
• How has COVID-19 affected mail-in voting in 2020?

What is vote by mail?

You’ve probably seen a fair number of articles about vote by mail or mail-in voting ahead of the 2020 election. This is often referred to as absentee voting.

To vote by absentee (or mail-in) ballot, you typically must apply to do so by a certain date (but not all states require this). The state then mails you a ballot and you return the completed ballot by mail (or in person) before Election Day.

Voting by mail in the U.S. originated during the Civil War, when both Confederate and Union soldiers were allowed to fill out ballots while deployed and have them counted in their home jurisdictions. Today, some states still limit the use of absentee ballots to active-duty military (and their families) living overseas and to other voters who meet a handful of specific criteria such as illness. But many states no longer require an excuse to vote by mail. And some have moved to an all-mail voting system.

If you’re currently living outside the U.S. or are an active-duty member of the military, you can register to vote and request your absentee ballot at the same time with the Federal Post Card Application. Check out VoteAmerica for more information on voting as an overseas voter or voting as a member or spouse of the active-duty military.

Can I vote by mail?

Although you can’t vote online in any federal election, each state does allow absentee voting. But some states still have restrictions in place that specify who can request and receive an absentee ballot and what circumstances are considered valid reasons for voting by mail.

The 2020 election may be different because of COVID-19, so your state election officials may automatically send an absentee ballot to your home address on file with a return envelope if you’re a registered voter, or they may accept the pandemic as a reason to request an absentee ballot. It’s important to check your state’s requirements for voting by mail.

How do I vote by mail?

Step-by-step, here’s how to vote by mail if you’re eligible to do so in your state.

1. Make sure you’re registered to vote in your state. Whether you plan to vote by mail-in ballot or in person, you need to be registered to vote. You can visit the Credit Karma app, VoteAmerica or vote.gov to check your registration status and register online if necessary. Thirty-nine states and the District of Columbia allow you to register to vote online. Or, you can download the National Mail Voter Registration Form and mail it in to register to vote.

2. Apply for/request an absentee (or vote-by-mail) ballot. Unless you live in a state that’s automatically mailing ballots to registered voters this year, you’ll need to request an absentee ballot before Election Day. Follow your state’s guidelines for submitting an absentee ballot application, which may mean filling out a form or sending a written request by a certain date.

3. Complete and return your ballot on time. Every state has a deadline for returning an absentee ballot. Be sure to get yours in by that date so that your vote can be counted. The Postal Service’s general counsel recently warned all states and the District of Columbia that ballots mailed close to Election Day might not arrive in time to be counted in the election. So, it may be a good idea to request and return your mail-in ballot as early as possible. Check the Credit Karma app to learn more about how to return your ballot.

You may be able to drop your ballot at a ballot drop point depending on where you live. The National Conference of State Legislators has compiled a chart of some states that will allow voters to return mail-in ballots in drop boxes.

New Hampshire and Vermont voters can drop off their ballots at their assigned precinct polling places on Election Day.

What’s the deadline to return an absentee ballot?

Deadlines for requesting and returning a mail-in ballot vary depending on where you live. The map below shows the key deadlines for absentee ballots in your state. For more information, check out the Credit Karma app or visit VoteAmerica’s website or the U.S. Vote Foundation website and check your state or territory’s deadlines.

Image: votebymail-1

Remember, postal delays may occur, so if you intend to vote by mail, returning your ballot as soon as possible — and well before Election Day — may be the best way to ensure your vote gets counted.

Can I track my vote by mail ballot?

Some states allow you to track your vote-by-mail ballot. Generally, you’ll want to go to your state election website to track whether your ballot has been processed. You can find your county’s election website through the Credit Karma app or by looking up contact information for your county election office on VoteAmerica’s website.

How has COVID-19 affected mail-in voting in 2020?

Because of the ongoing COVID-19 pandemic, some states have waived their typical requirements for absentee voting or will accept the pandemic as a reason to request a mail-in ballot rather than voting in person. Currently, 33 states plus the District of Columbia will allow you to vote by mail-in ballot without an excuse, according to the National Association of Secretaries of State. You can find state-specific information on your state’s board of elections website or on the federal U.S. Election Assistance Commission’s website.

If for some reason you don’t receive your absentee ballot in time, or you change your mind and want to vote in person either when early voting begins ahead of Election Day or on Election Day itself, keep in mind that your state or local government may have social distancing measures in place. You should be prepared for the possibility of standing in a longer line or experiencing some delays in voting.

What’s next?

A New York Times analysis recently concluded that more than 75% of American voters are eligible to vote by mail this year.  

With the pandemic likely to affect the 2020 election, the majority of Americans say they’d rather avoid the polling place on Election Day, according to a recent Pew Research survey. Thirty-nine percent said they would rather vote by mail and 18% said they would prefer to vote in person before Election Day.

If you prefer to stay away from the polls, check your state’s vote-by-mail rules to see if you’re eligible. Then request, complete and return you ballot within your state’s guidelines to cast your vote in the 2020 general election. And remember, given the potential for mail delays, returning your ballot as early as possible may help ensure your vote gets counted.

Knowing how to vote is key to exercising your constitutional rights as an American aged 18 and older. But the answer to the question “How do I vote?” varies depending on where you live.

Tuesday, Nov. 3, 2020, is Election Day across the U.S. This year, voters have the chance to cast their ballots for president as well as for state and local positions including senators, governors and county officials.

How can you vote this year? The first thing to know is that how you vote depends on where you live. The National Voter Registration Act establishes certain requirements for federal elections. States and local governments have their own regulations, though, so it’s important to know the rules in your state.

• Step 1: Register to vote
• Step 2: Learn about what’s on the ballot in your state/local jurisdiction
• Step 3: Choose how you’ll vote: In-person or by mail
• How has COVID-19 affected voting in 2020?

Step 1: Register to vote

The first step in voting is to register to vote. You can visit the Credit Karma app, VoteAmerica or vote.gov to register online. Thirty-nine states and the District of Columbia allow online voter registration. Or, you can download the National Mail Voter Registration Form and mail it in to register to vote.

Know your state’s voter registration deadlines

There are some important deadlines for voter registration, and this varies depending on where you live. Check out the map below for key voter registration deadlines in your state.

If you’re living outside of the U.S. or are an active-duty member of the military, you can register to vote and request your absentee ballot at the same time with the Federal Post Card Application. Check out VoteAmerica for more information on overseas voting or voting as a member or spouse of active-duty military personnel.

Know what information you’ll need in order to register to vote

You’ll need to provide some basic info about yourself in order to register, and what’s needed can vary from state to state. In every state, you’ll need to be a U.S. citizen (some states may require proof of citizenship) and be at least 18 years old.

Know how to confirm that you’re registered to vote

Once you’ve registered to vote, you’ll want to check to make sure you’re on the voting register. Remember that it may take a few weeks from when you register to vote until your name shows up on the voter rolls.

You can check the status of your registration through the Credit Karma app, by visiting VoteAmerica or by going to your county board of elections website.

Step 2: Learn about what’s on the ballot in your state/local jurisdiction

Just as it’s important to know deadlines for voting in your state, it’s also important to know who’s running for office and what issues are on the ballot this election cycle. You can generally go to your local board of elections website to view a sample ballot ahead of each election.

What information will be on a ballot?

What you’ll see on a ballot when you vote varies depending on where you live. But there will be a few general pieces of information you’ll see on every ballot, such as the office being voted on, the names of each candidate running for that office and each candidate’s party affiliation.

For a general election like the one on Election Day 2020, you’ll see options to vote for presidential candidates, congressional representatives, and you may see options for a variety of state and local races as well.

Step 3: Choose how you’ll vote: In-person or by mail

As a U.S. voter, you have options on how to vote in each election. You can either vote in person or by mail with an absentee ballot. There are some key things to know depending on which option you pick.

Voting in person

It’s important to understand that if you vote in person you’ll need to know your polling location. Early voting may be possible depending on where you live.

Whether you’re voting early or on Election Day, you’ll need to know what to bring with you in order to vote. Although the specific requirements to vote vary by state, you may need to have your voter registration card or a driver’s license or other state-issued ID in order to vote. You can visit your state’s election website or the National Conference of State Legislatures website to learn more about state-specific voter ID requirements.

If you need help with voting, federal law states that you have a right to accessible voting at your polling place and assistance from a poll worker. Visit the U.S. Election Assistance Commission’s website for more information.

Voting by absentee ballot

Voting by absentee ballot is another option if you can’t vote in person. This is also referred to as “vote by mail” or voting by mail-in ballot. It’s important to know if your state requires a reason for an absentee ballot when you ask for one.

There are also deadlines for returning a mail-in ballot. The map below shows the key deadlines for absentee ballots in your state and whether you need an excuse for requesting to vote by mail.

For more information, check out the Credit Karma app or visit VoteAmerica’s website or the U.S. Vote Foundation website and check your state or territory’s deadlines.

How has COVID-19 affected voting in 2020?

Because of the ongoing pandemic, some states have waived their typical requirements for absentee voting or will accept the pandemic as a reason to request a mail-in ballot rather than voting in person. You can find state-specific information on your state’s board of elections website or on the federal U.S. Election Assistance Commission’s website.

When voting by absentee or mail-in ballot, the U.S. Postal Service and many states are encouraging voters to mail their ballot at least one week before their state deadline for submission. This will allow time for ballots to be delivered to the election offices.

If you do end up voting in person, either when early voting begins ahead of Election Day or on Election Day itself, please be mindful of safety. Your state or local government may have social distancing measures in place to help with safety, but these could mean standing in a longer line or some delays in voting.

And remember, no matter what anyone says while you’re attempting to vote in person, if you are in line to vote when your polling place closes, you have the right to stay in line and vote.

What’s next?

Voting is fundamental to democracy. And it makes a huge difference in shaping the future of the U.S., your state and your local government. Elected officials decide things like who pays taxes and how much those taxes are, how much money goes toward public services, and what laws are on the books that make activities legal or illegal.

It can be daunting to navigate the paperwork and various local regulations related to voting. But armed with knowledge about how the election process works, you’ll be able to vote with confidence on Election Day 2020 and beyond.

The shift to at-home education this school year is taking a financial toll on many parents, according to a new Credit Karma survey.

In July, we surveyed more than 1,000 parents whose children will be taking classes or learning from home at least part time during the school year because of COVID-19 restrictions. We found that many — one-third (33%) of all parents surveyed — don’t feel financially prepared to pay for school-related needs, while 25% have already gone into debt to purchase at-home school supplies.

Our survey also found that more than one in 10 parents (12%) expect that by the end of 2020 they’ll need to take on debt to support their children’s education. (Learn more about our methodology.)

And when it comes to the new challenges of at-home learning, some feel the strain more than others. Many working parents from our survey (62%) said they’ve had to compromise their careers to accommodate their kids’ at-home education. Meanwhile, single mothers were the most likely group to say they feel financially unprepared to pay for at-home school supplies this upcoming school year (52%).

The new reality facing many parents and students this year makes planning and budgeting more important than ever. We’ve got some tips to help with budgeting and shopping for supplies during an atypical school year. 

Key survey findings

How much debt are parents taking on?

Setting aside any additional costs for childcare, a significant number of parents from our survey (25%) have already gone into debt to purchase at-home school supplies for their children this year. Here’s how much debt these parents have gone to buy those learning supplies.

• Less than $100: 10%
• $100–$500 in debt: 43%
• $501–$1,000 in debt: 22%
• More than $1,000 in debt: 25%

Our survey also found that married men were the most likely group to take on debt for at-home school supplies — 34% of married men reported doing so, as did 32% of men overall. By comparison just 16% of married women and 21% of all women surveyed reported doing so. 

What’s driving parents’ education-related debt?

The transition to at-home education is posing financial challenges for many, but some supplies are particularly costly for families, according to our survey.

For parents who have gone into debt this year to buy at-home schooling supplies for their kids, here are the top items that primarily caused them to go into debt.

1. Laptop, iPad or tablet: 39%
2. WiFi or other internet expenses: 12%
3. Daily meals: 10%
4. Learning software: 8%
5. Video conferencing tools: 8%
6. Textbooks: 8%

While every family’s situation may be unique, there were a few common reasons parents gave in our survey for going into debt for their child’s education:

• I now have to provide learning supplies that I typically rely on my kid(s)’ school to provide, such as textbooks, pens, notebooks, learning software or laptops/tablets, etc. (38%).
• I had no option other than going into debt to provide school supplies (32%).
• I now have to pay for breakfast and lunch for my kid(s), which their school usually provides (27%).

And all of this is despite the fact that 67% of all parents from our survey said they’re receiving (or will receive) at least some support from their children’s school districts. 

Working parents, single moms may have it the hardest

The transition to at-home education has been especially tough for working parents and single mothers, our survey found.

When it comes to adjusting to having to balance work and their kids’ education, here’s what working parents from our survey said:

• Nearly two-thirds (62%) of working parents report feeling that they need to compromise their careers to accommodate the changing needs of educating their kids from home.
• Almost two-thirds (65%) say they’re working more hours now due to needing to help their kids with their at-home learning.
• More than one-third (34%) of working parents say they don’t have flexibility in their workdays to accommodate at-home education for their kids.

And when it comes to single mothers, they may have extra financial pressures, according to our survey’s findings.

Over half of unmarried mothers (52%) from our survey say they feel financially unprepared to pay for school-related necessities this upcoming school year. By comparison, only 35% of unmarried men, 31% of married women and 15% of married men said the same.

Tips to help you shop for an uncertain school year

With all the expenses that come with at-home education, it’s no wonder a third of parents surveyed (33%) feel financially unprepared. But we’ve got some tips that might help you minimize extra expenses for supplies this school year.

Assess what you already own and prioritize future spending on must-haves. Your child’s school should communicate a back-to-school plan that includes a supply list. Make sure you check the list and assess what items on the list you already have, what you must get in order for your child to do their work and which supplies they could do without.

Track your spending and keep a budget. Another recent Credit Karma survey found that many Americans have developed some helpful financial habits during the pandemic, like keeping a closer eye on their finances or setting a monthly budget. If you can, consider bucketing your spending and savings and focusing on putting any savings towards emergency expenses.

Choose school supplies that will serve multiple types of learning and hold up over time. This school year is different because your child may be learning entirely remotely or may have a mix of in-person and online learning. School supplies that can easily transition from online to in-person learning may make more sense. And keep in mind that safety is more important than ever. With clothing, shoes, masks and backpacks, think about what items will be durable and hold up to extra washing.

Compare prices and consider refurbished or secondhand items. It might be too risky to do in-person shopping for this school season, but that doesn’t mean you shouldn’t compare prices to find a good value. Make sure you look online for pricing from a few retailers before ordering an item either online or in-person. Consider buying refurbished for any electronics like laptops or tablets for savings. Other items like desks or chairs that you might need for a home classroom or office could come from places like Craigslist or Facebook Marketplace — just be sure to give secondhand items an extra cleaning.

Methodology

On behalf of Credit Karma, Qualtrics conducted a nationally representative online survey in June 2020 among 1,006 parents of children who will be learning or taking classes at home at least part-time during the upcoming school year to better understand how parents expect to spend money on their kid(s)’ education expenses.

What does a budget look like during a pandemic? A new nationally representative Credit Karma survey found many people are having to shift their focus away from wants and savings during the pandemic — and focus more on the essentials.

The traditional 50/30/20 budgeting guideline says that you should put about 50% of your after-tax monthly income toward essentials like food and housing, 30% toward wants, and 20% toward paying down debt or saving.

Though bucketing your spending this way can be helpful to track and manage your monthly spending in “normal” times, things look a bit different right now. Here’s what our survey found.

• 46% of respondents are spending more than 50% of their monthly income on needs like bills, groceries, childcare and housing.
• 41% are spending less than 15% of their monthly income on wants like entertainment, hobbies and shopping.
• 45% are putting less than 15% of their monthly income toward savings.

With so many Americans allocating less than 15% of their monthly income to both the wants and savings categories, budgets might look a little different than the 50/30/20 standard. Out of necessity, you might be budgeting 60% or more of your after-tax pay to necessities, while your wants and savings get less. In extreme cases, your budget might look more like 80/10/10 — where 80% of your monthly income goes toward needs, 10% goes toward wants and 10% goes into your savings.

If this sounds like your situation, we’ve got some tips on how you can work within this new budgeting framework to stay flexible during uncertainty while still leaving some room to save for the future.

Tips to help you budget during the pandemic

• Track your spending and keep a budget. Another recent Credit Karma survey found that some Americans have developed helpful financial habits during the pandemic that they’d like to keep, including keeping a closer eye on their finances and keeping a monthly budget. Seeing your spending and savings in writing can help you nail down your finances. Start with a budget breakdown that works for you right now, like 80/10/10 (or some version of it), and then categorize your spending and savings into each of these large buckets — or you could break your spending down even further. The most important thing is to begin tracking where your money is going.
• Make sure to prioritize saving for emergencies. We generally recommend saving up to 20% of your monthly income for the future — though it might be hard to ration out that much to savings right now. It’s still important to plan ahead so that you can help cover emergency expenses with your savings.
• Find ways to cut your monthly expenses. This could be a good opportunity to reassess your spending. Think about what you’re not really using right now, like a gym membership or satellite radio subscription for your car, and take the steps to pause or cancel these subscriptions. If you’ve already made these cuts, look into negotiating your cellphone contract, adjusting your auto insurance policy or talking to your landlord about lowering your rent, even if just temporarily.
• Remember you’re not alone — many others are also figuring out how to navigate the current situation. Right now, you may be spending more on bills and saving less than you’d like — and that’s OK. Keep in mind that the current situation is temporary, and financial progress isn’t linear. It may take some time. Right now, prioritize keeping yourself and your family healthy and safe.

Methodology

On behalf of Credit Karma, Qualtrics conducted a nationally representative online survey in June 2020 among 1,043 adults to better understand how their spending habits have changed during the coronavirus pandemic.

Plan your spending with our budget calculator

You can use our budget calculator to get a clearer picture of how much money you’re spending, what you’re spending it on and where you could improve.

This offer is no longer available on our site: Amex EveryDay® Credit Card

Pros

• Earn bonus points on qualifying U.S grocery store and U.S. gas station spending categories
• Earn 50% more points if you make 30 or more separate purchases within a billing cycle
• Solid welcome bonus

Cons

• Annual spending cap on bonus points on U.S. grocery store purchases
• Annual fee not waived the first year
• Foreign transaction fee

4 things to know about The Amex EveryDay® Preferred Credit Card from American Express

1. Earn American Express Membership Rewards® points for several categories

The ability to earn extra points on certain everyday spending categories makes the Amex EveryDay® Preferred Credit Card from American Express a solid option to carry in your wallet.

This card offers American Express Membership Rewards® points for several spending categories.

• Three points for every $1 spent on purchases at U.S. grocery stores, on up to $6,000 annually (then one point for every $1 spent on purchases after that)
• Two points for every $1 spent on purchases at U.S. gas stations
• One point for every $1 spent on all other purchases

While the Amex EveryDay® Preferred Credit Card from American Express isn’t the only card that offers rewards points in these common spend categories, it does allow you to earn more points than the $0-annual-fee Amex EveryDay® Credit Card. You’d also spend a lot less on an annual fee compared to the American Express® Gold Card, which charges a $250 annual fee. The Amex EveryDay® Preferred Credit Card from American Express charges a $95 annual fee.

2. Earn bonus rewards points with frequent use

Perhaps the most unique perk that the Amex EveryDay® Preferred Credit Card from American Express offers is its extra bonus points benefit, which you get by using the card frequently. If you make at least 30 separate purchases on goods and services within one billing cycle, you can earn 50% additional points on those purchases.

That means you could earn points at these higher rates.

• 4.5 points for every $1 spent on purchases at U.S. grocery stores, on up to $6,000 annually (then 1.5 points for every $1 spent on purchases after that)
• 3 points for every $1 spent on purchases at U.S. gas stations
• 1.5 points for every $1 spent on all other purchases

The bottom line is that this card is truly designed for frequent use in order to get the most points possible. But if you’re considering whether to add it to your wallet, think carefully about how frequently you plan to use it and if you want to make it your primary card.

3. Calculate if the annual fee is worth it

It’s important to weigh the points-earning potential of the Amex EveryDay® Preferred Credit Card from American Express against its $95 annual fee. And since that annual fee isn’t waived the first year, you’ll need to use the card enough from the start to make up for it.

How much is enough? It depends on what you use the card for. Let’s say you want to use it for groceries, but you’re not going to make at least 30 transactions within a billing cycle for that 50% points bonus to kick in. In this scenario, assuming the lowest possible point valuation of 1 point equal to 1 cent, you’d need to spend at least $3,167 on groceries each year to earn enough points to offset the card’s annual fee.

Keep in mind that you’ll earn points at a much faster rate if you use the card for at least 30 transactions within one billing cycle. And those transactions could be for small purchases you likely already make at places such as the corner store, grocery store or gas station.

4. You can earn a decent welcome bonus

The Amex EveryDay® Preferred Credit Card from American Express offers a pretty decent welcome bonus of 15,000 points if you spend $1,000 on eligible purchases within three months of opening your account.

Those 15,000 bonus points are worth between $150 and $300, depending on whether you calculate the value of points at the rate of 1 point equal to one cent or 1 point equal to two cents. Our latest points valuation guide puts the value at around two cents per point.

You can use American Express Membership Rewards points to book travel, buy gift cards or shop online.

The spending threshold to receive the bonus is $1,000 in three months, which shouldn’t be too unreasonable if you use the card for everyday spending. Of course, it’s important not to spend more than you normally would just to get the bonus, so consider whether you’d normally spend $1,000 in three months before applying for this card.

Who this card is good for

As the name implies, the Amex EveryDay® Preferred Credit Card from American Express is most effective if you truly plan to use it for frequent, everyday spending. That’s because in order to offset the card’s $95 annual fee and maximize points, you’d need to use the card for all your grocery store and gas station purchases and make at least 30 transactions per billing cycle to get the 50% points boost.

You’ll also want to keep in mind that grocery purchases must be made at qualifying U.S. supermarkets, which don’t include big-box stores like Target and Walmart or warehouse stores like Sam’s Club and Costco. So if you shop for most of your groceries at those stores, you may want to think about a different card.   

As with any credit card, when considering the Amex EveryDay® Preferred Credit Card from American Express, think about your budget and how you spend your money. It’s never a great idea to spend more than you normally would just to earn rewards.

And take note that this card charges a 2.7% foreign transaction fee. So if you frequently travel abroad, you’ll want to take another card with you instead.

Not sure this card works for you? Consider these alternatives.

If you’re unsure whether the Amex EveryDay® Preferred Credit Card from American Express is right for you, here are several alternatives you may want to consider.

• Amex EveryDay® Credit Card: If you’d prefer a card with no annual fee and somewhat similar benefits, you may want to consider this card.
• Blue Cash Preferred® Card from American Express: This card is a good option if you want cash back on several different everyday spending categories.
• American Express® Gold Card: If you want to earn rewards for both food and travel purchases, this card might be a better bet despite its annual fee.
• Capital One SavorOne Cash Rewards Credit Card: If you want a card that offers rewards for everyday spending categories with no annual fee (and aren’t married to American Express), this could be a good option for you.

The coronavirus pandemic is changing Americans’ spending habits, according to a Credit Karma survey that found that nearly half now realize they don’t need to spend money on dining out.

Many respondents said they also no longer feel the need to spend money on gym memberships, going to the movies, or attending concerts and other live entertainment.

In the past we’ve talked about how the fear of missing out, or FOMO, can lead people to overspend to keep up with friends. But our recent survey indicates that FOMO-related spending may be seen as less essential for the future. Almost half (44%) of respondents from our survey said they think they’ll feel less pressure to spend money to keep up with appearances once the pandemic is over. (Learn more about our methodology.)

In addition to potentially feeling less social pressure to spend, some survey respondents said they’ve developed healthy financial habits — like monitoring their finances more closely and setting up a monthly budget — that they plan to continue after the pandemic. However, time will tell whether people stick to their newfound spending habits: A full 43% of respondents said they plan to “treat themselves,” by spending more than they usually do on items or activities, when the economy fully re-opens.

Key survey findings

What are Americans planning to stop spending on post-pandemic?

The coronavirus pandemic has led some Americans to change the way they think about necessities when it comes to day-to-day spending, our survey found.

Here are the top five things that people we surveyed have realized they can stop spending money on.

1. Dining out (47%)
2. Seeing a movie in a movie theater (37%)
3. Live music or entertainment (28%)
4. Gym memberships (27%)
5. Clothing (26%)

How has the pandemic changed Americans’ financial habits for the better?

The coronavirus pandemic has had a positive effect on how many Americans track and plan their finances, according to our survey. For instance, 78% of respondents developed a new personal finance habit during the pandemic that they’re planning to continue once COVID-19 subsides.

According to our survey, here are the top three positive financial habits that Americans want to continue once the pandemic is over.

1. Tracking personal finances more closely (37%)
2. Cutting costs on daily expenses (33%)
3. Keeping a monthly budget (31%)

And although about two in five (41%) respondents said they’ve felt pressured to spend money in the past to keep up with others, nearly half (44%) of Americans recently surveyed said that after the pandemic they’ll be at least a little less likely to feel social pressure to spend money. On the other hand, almost one in five (16%) think they’ll feel more social pressure to spend after the pandemic.

In addition, more than two-fifths of respondents (43%) said they plan to “treat themselves” once the economy fully re-opens. So even though the pandemic seems to be encouraging people to adopt healthier financial habits, it’s unclear whether the trend will continue post-pandemic.

Tips to keep your budget on track during and after the pandemic

If your spending habits have changed for the better during the pandemic, or you’d like to use this time to try out some new financial tactics, here are some tips to keep yourself on track regardless of whether you’re quarantined at home or free to go out and spend.  

• Track your spending and keep a budget. Many Americans we surveyed said that helpful financial habits they’ve developed during the pandemic include either keeping a closer eye on their finances (37%) or keeping a monthly budget (31%). In pre-pandemic times we might have recommended something like the 50/30/20 budget rule — and that may still be the right approach for some. But for others it may be more important right now to keep a closer eye on spending with a goal of saving anything you can to cover emergency expenses.

• Find ways to cut your monthly expenses. More than a third of respondents from our survey (34%) said they haven’t yet taken any action to lower the cost of their monthly bills. If this describes your situation, know that the pandemic can be a good opportunity to reassess your spending. Think about what you’re not really using right now. Maybe you’re driving a car less and don’t need as much insurance coverage? This could be the time to call your auto insurer and ask for a discount or other policy adjustment — something 15% of those surveyed have done.

• Be open and honest with friends and family about your financial situation. Money is one of the top stressors for American adults, according to a 2019 report from the American Psychological Association, and it comes with complicated feelings. So it can be tough to talk about money with others. And though your comfort level may vary depending on how well you know someone, talking about your finances can help you let go of feelings of shame and guilt and also help those closest to you better understand your situation.

• Be kind to yourself and know that the path toward financial health takes time. Consider reframing how you see things. Treat cutting back on spending, getting your finances in shape and saving more as “intentions” rather than firm goals. This framing leaves space for you to be kinder toward yourself if you fall short. It’s also important to acknowledge that progress isn’t linear and may take some time.

Methodology

On behalf of Credit Karma, Qualtrics conducted a nationally representative online survey in June 2020 among 1,043 American adults to better understand how their spending habits have been impacted during the coronavirus pandemic.

A savings account routing number is a nine-digit number that’s used to identify the bank that holds the account.

If you have a checking account, you’re probably familiar with the account information you see at the bottom of your check: the routing number, account number and check number. The routing number is nine digits, and is the first number you see on the very left side of the bottom of the check.

Savings accounts also have routing numbers. As with checking accounts, a savings account routing number is key to being able to move money in or out of the account. You can typically find your savings account routing number when you log into your online banking profile. It may also be available on your checks, if your bank prints checks for the type of savings account you have.

Let’s take a look at what your savings account routing number does, how to find it, and how to transfer funds or pay bills using it.

What is a routing number?

Think of a routing number as your financial institution’s GPS. Created in 1910 by the American Bankers Association, routing numbers help U.S. banks keep track of money being deposited and transferred into accounts they maintain.

These days, routing numbers also make digital transactions possible through peer-to-peer payment apps like Zelle or Venmo.

Each federal- or state-chartered U.S. bank, credit union or other financial institution has its own unique routing number. These routing numbers help direct funds from one account to another.

How do I find my savings account’s routing number?

Although every financial institution is a little different, you’ll likely find your routing number on …

• The account overview area of your financial institution’s mobile app
• The bottom-left corner of a printed check
• Your bank’s website

How do I read the routing number?

Here’s a breakdown of the digits in a savings account routing number.

As the visual above shows, different digits in your routing number have different meanings. Here’s a more detailed explanation.

• The first two digits refer to the regional Federal Reserve bank that oversees financial institutions in your area.
• The third digit refers to the check processing center that’s been assigned to your financial institution.
• The fourth digit is the state of the Federal Reserve district that your financial institution is located in.
• Digits 5–8 make up the unique identifier number for your financial institution.
• The ninth digit is a “checksum” — a mathematical formula based on the sum of the first eight digits in the routing number (something a little more complicated than plain old addition).

How do I use my savings account’s routing number?

Now that you know where to find the routing number associated with your savings account, you might wonder why and how you’d use it.

The three main ways this routing number may come in handy include paying your bills, setting up direct deposit with an employer and transferring money between accounts.

Paying your bills with your savings account

You can pay your bills using a money market savings account, a type of savings account that comes with checks, among other benefits.

If you don’t have a money market account, you could opt to set up automatic bill pay from a designated account using electronic transfers. In either case, having your routing number handy can simplify the process.

Setting up direct deposit with your savings account

Other ways you might want to use your savings account include setting up a direct deposit of your paycheck from your employer. Signing up for this option typically requires both your bank account and routing numbers to execute.

Consider setting up direct deposit if you’re saving for a goal and want to make regular deposits into your savings account.

Making a wire transfer with your savings account

Another situation could involve transferring money from one checking or savings account to another account with a different financial institution. This type of transfer is sometimes called a wire transfer.

This might be something you’d use if you’re dealing with an emergency and need to access funds quickly.

Bottom line

The routing number to your savings account is key to being able to move money in or out of your account. It helps make it possible to pay bills, set up direct deposit or transfer funds.

While a savings account routing number can help you move funds around, be aware that unlike with a checking account, you may be limited with a savings account in terms of the number of transactions you can make without a fee.

A previous version of this article used VantageScore® 1.0 data instead of VantageScore® 3.0 data, despite stating it was VantageScore® 3.0. We have updated all the credit score–related data in this article to reflect VantageScore® 3.0.

Credit Karma members on average had 8% more total overall debt in May 2020 than they had in May 2019, while their average VantageScore 3.0 credit scores rose slightly year over year.

That’s the main takeaway from Credit Karma’s first State of Credit and Debt Report, which provides analysis of debt and credit trends based on data from millions of Credit Karma-member accounts. (Learn more about our methodology.)

In this first edition of the report, we looked at data from May 2019 and May 2020 to determine year-over-year changes across Credit Karma membership related to overall debt, VantageScore 3.0® credit scores, status of accounts and demand for credit.

Read on for more, including data and analysis by generation and geography.

Credit Karma stat snapshot

Debt spotlight

• Credit card
• Auto
• Mortgage
• Student loan

Credit scores

Payments

• Past-due accounts
• Open collections

Credit demand

Improving credit health

Credit Karma stat snapshot

Among Credit Karma members …

Overall

Generations

Geography

Debt

In May 2020, average total overall debt among Credit Karma members was $74,624. That’s an 8% increase from May 2019, when average total debt was $69,067.

The chart below shows the percentage increase in members’ average total overall debt across states in the past year. States with the highest debt increases — led by Washington and Utah (both 8%) — are shaded darkest.

States with the least increase in debt were Rhode Island and Connecticut (both 2%).

Credit card debt

Average total credit card debt among Credit Karma members was up 1% year over year in May 2020.

• Credit Karma members in Midwestern cities tended to have lower credit card debt, while cities in the South had some of the highest, our data showed.

• Credit Karma’s Gen Z members had the least credit card debt as of May 2020. Baby boomers had the most, with Gen X not far behind.

Based on Credit Karma members with credit card debt in May 2020

Auto loan debt

Average total auto loan debt was up about 2% among Credit Karma members in May 2020 compared with May last year.

• Auto loan debt is highest for those with good credit scores. Our analysis found that Credit Karma members with average VantageScore 3.0 credit scores from 660 to 719, which are considered within the good score range, carried the highest average auto loan debt at $22,448 in May 2020.

• Gen Xers had the highest average monthly auto payment. Gen X members were paying $445 per month on average for their auto loans in May this year. Gen Z had the lowest average monthly auto loan payment at $349.

Mortgage debt

Average mortgage debt among Credit Karma members was almost 5% higher in May 2020 than in May 2019.

• Credit Karma members in California had the highest monthly mortgage payments in May. Six of the 10 cities with the highest average monthly mortgage payments in May 2020 were in California.

• Gen X had the highest average mortgage debt. The average open mortgage debt for Gen X members in May this year was $210,712. Gen Z members had the lowest average mortgage debt at $162,000 — a 30% difference.

Student loan debt

Average total student loan debt among Credit Karma members was up 7% in May this year from May 2019. Keep in mind that from March 13 through Sept. 30, 2020, the interest rate for federally owned loans is set to 0%, and mandatory payments for these loans are suspended. Privately owned student loan lenders are not required to suspend the accrual of interest or the collection of payments. The data below reflects debt reported to TransUnion as student loan debt, and it may include data for both private and federal student loans.

• Gen X had the most student loan debt. Our data shows that Gen X members had more than three times as much student loan debt on average as Gen Z members in May 2020.

• Average monthly student loan payments were higher for Credit Karma members in the Northeast and lower in the South. The average monthly student loan payment was about twice as much in New Hampshire (about $49) as it was in Alabama (about $24).

Credit scores

The average VantageScore 3.0 credit score for Credit Karma members in May 2020 was about 651 — four points higher than in May 2019. VantageScore 3.0 considers credit scores between 600 and 660 to be in the “fair” range.

• Not all generations had credit scores in the same range. While most Credit Karma member generations fall squarely within the “fair” range of credit scoring, members of the silent and Baby Boomer generations had average VantageScore 3.0 scores of 726 and 689, respectively — both within the “good” range.

• Members in southern states had the lowest average VantageScore 3.0 credit scores. The 10 states with the lowest average VantageScore 3.0 credit scores in May were all in the South. The lowest average VantageScore 3.0 score in May was among members living in Mississippi, at 624. The highest average credit score was in New Hampshire, at 668.

Payments

On average, Credit Karma members across the U.S. have a record of making on-time payments 98% of the time as of May 2020.

Zeroing in on data for different states, the lowest on-time payment rates were among members in Louisiana and Mississippi (represented by the lightest shades in the chart) — at 95%, on average.

Past-due accounts

The average number of past-due accounts for Credit Karma members was down slightly in May 2020 compared with a year earlier. However, on average all Credit Karma member accounts had at least one past-due account.

• Some generations have made progress on past-due accounts. Our data shows that every generation of Credit Karma members had on average at least one past-due account in May 2020. But baby boomers, Gen Xers and millennials have made progress since May 2019, when Credit Karma members in these generations averaged two past-due accounts.

Open collections

The average number of accounts in collections recorded on Credit Karma member credit reports was slightly lower in May 2020 compared with last year.

• Some generations had fewer accounts in collections on average compared with other generations. Gen Z members and members of the silent generation have an average of two accounts in collections, while other generations had an average of three accounts in collections.

Credit demand

The number of average credit inquiries across all Credit Karma members was down slightly in May 2020 compared with a year earlier, reflecting slightly less demand for credit year over year.

• Gen X Credit Karma members had the most credit inquiries on average, with six — while members of the silent and greatest generations had four inquiries on average.
  
• The number of inquiries also varied by city. San Francisco-based Credit Karma members had an average of three inquiries on their reports as of May this year, well below the average of five. On the other hand, Credit Karma members had an average of eight inquiries in Milwaukee, St. Louis and Laredo, Texas.

Tips for improving credit health

Anyone can improve their credit if they get up to speed on how it works — and then use it carefully and strategically. Here are some tips.

Understand what factors affect your credit scores

Your payment history, or how often you make on-time payments, is the most important factor that goes into determining your credit scores. That’s why it’s so important to pay at least the minimum balance on your bills each month.

Your scores are also affected by factors like credit utilization (how much of your available credit you actually use), your credit history and more. If you have an account in collections or an overdue account, you’re not alone — and it can impact your credit scores.

Understand how to use good credit to your advantage

Typically, when you have a better credit profile, you can often qualify to borrow the money you need — and at a lower cost — than you would with credit that’s not as strong.

For example, Credit Karma members with good credit scores in May this year had the most auto loan debt. This could be because they were able to borrow enough to afford the vehicles they wanted.

Borrow only what’s necessary

Taking on extra debt that you don’t pay off right away may cause credit scores to decline, since utilization is a key factor in credit scores. It’s generally considered a good rule to make sure you’re using less than 30% of the total credit you’re borrowing.

Although Credit Karma member debt overall was up 8% from May 2019 to May 2020, credit scores also held steady among members. One reason could be that credit utilization ratios weren’t dramatically affected.

Be picky about the kind of debt you do take on

Some types of debt are considered better than others. Mortgages or student loans may cost more upfront but are considered to be good debt because they could lead to longer-term financial gains.

Credit card debt may not be as costly upfront, but it doesn’t leave you with appreciating assets — so it’s considered bad debt.

Keeping your “bad debt” as low as possible can help strengthen your credit profile.

Methodology

To determine averages across overall debt (including but not limited to credit card, mortgage, personal loan, student loan and auto loan debt), VantageScore® 3.0 credit score, payment and credit-seeking trends in May 2020, we analyzed the accounts of about 89 million U.S. Credit Karma members in aggregate. All aggregate data analyzed came from members’ TransUnion credit reports.

For the purposes of this analysis, card debt is defined as any unpaid balances existing on members’ credit cards in aggregate at the time the data was pulled. We also looked at aggregate data of more than 22 million U.S. members with ZIP codes in the top 100 most populated U.S. metro areas to see trends by city. All numbers in this report were rounded to the nearest whole.

Whether we like it or not, credit scores play a huge role in our lives.

Your credit scores may help determine whether you have access to favorable rates for auto loans and mortgages, or whether you’ll be able to get approved for certain credit cards or personal loans.

You might already know there are two major credit-scoring models: VantageScore and FICO. And they take a few key factors into consideration when determining your credit scores, including credit card utilization, payment history and age of your credit history. But while knowing these factors helps you understand how the scoring models calculate your credit scores, it doesn’t really help identify what actions you can take that can help build credit.

That’s why we reached out to our members to ask them about the actions they took that they think led to improvements in their credit health.

We surveyed more than 2,000 members who joined Credit Karma between January 2016 and December 2018 with a deep subprime or subprime TransUnion VantageScore 3.0 credit score, and have since raised their score at least 50–99 or 100+ points. This increase lifted some out of deep subprime credit score range (580 or lower), and others out of the subprime credit score range (580 to 639).

We’re not here to tell you that taking these actions are guaranteed to increase your scores, but we’re hoping that these members’ actions will help you see that building credit is not impossible if you’re willing to put in the time and work. Here’s what we learned.

What members did to build their credit

Credit Karma members from our survey who saw their score increase said they followed a few common strategies to help build their credit.

More than half of members who responded to the survey (63%) said they paid down their existing debts. Other tactics included reducing overall expenses, paying bills more than once in a billing cycle, setting up autopay or payment reminders, and paying off or settling a collections account.

Here are the top five actions members said they used to help build their credit (plus, we’ve provided some insight into why taking these actions may have helped their credit health).  

1. Paying down credit cards and/or other debts

Most members surveyed said they paid down their credit cards or other debts.

Our take: Paying down credit card and other revolving debt can help build credit if you’re able to lower your credit utilization rate below 30%. Credit utilization rate describes how much of your total available revolving credit you’re using. Your credit utilization rate is one of the more important factors that goes into determining your credit scores, and it’s generally recommended to keep your credit utilization rate under 30%.

2. Reducing general expenses by spending less

Many members from our survey also said they thought spending less helped them improve their credit.

Our take: Spending less, especially on credit cards, could have helped these members build credit by lowering their overall utilization rates. Taking this action can also have the added benefit of making your debt and spending levels feel more manageable.

3. Paid bills more than once in a billing cycle

Many members also pointed to paying bills multiple times in a billing cycle.

Our take: Paying your bills more than once a billing cycle can help ensure you don’t miss a payment or make a late payment. Paying your credit card bills more than once a month can also help you keep an eye on your credit utilization rate and how much you’re spending on your cards.

4. Set up payment reminders and autopay

This is another action members said they took that may have helped them on their credit journey.

Our take: Making on-time payments is one of the most important factors that credit-scoring models take into account when determining your credit scores. In other words, having a long history of on-time payments is good for your credit scores, while missing a payment could hurt them. 

5. Paid off or settled a collections account

Many members from our survey said they thought paying off or settling a collections account may have helped their credit.

Our take: Having an account in collections can hurt your credit scores. How much it impacts your scores depends on the health of your credit and a number of other factors. Paying off or settling a collections account can remain on your credit reports as a paid collection, but it can reduce the impact to your credit scores depending on the credit-scoring model.   

There’s no guarantee that taking the above actions will improve your credit scores — every person’s situation is unique after all — but these findings reveal a few key learnings: Working on your credit is a conscious effort that involves setting personal goals for yourself, sticking to them and developing healthy financial habits over time.

And we definitely saw this with the members we surveyed. In addition to the credit-building actions reported above, most of the members we surveyed (71%) said that they set a specific credit score goal to actively work toward. And two-thirds (66%) of members we surveyed joined Credit Karma specifically to work on their credit.

My own credit-building journey

Like many of the Credit Karma members we surveyed, I’ve also been working on building my credit since learning what my credit scores were and what factors could affect them.

Everyone has their own credit journey story. Mine started with overspending on a credit card in grad school while I was between jobs. After that, I knew my credit wasn’t great. But I didn’t realize that forgetting to pay a credit card once or keeping a high balance on an account could impact my credit scores so much.

I knew I always wanted to be financially independent and to someday be able to get a better rate on an auto loan or mortgage. And once I had access to educational content that taught me about credit and ways to actively monitor my credit scores, I took action.

1. Paid down my debt — Like many Credit Karma members we surveyed, I worked to pay off my credit card balances and other debts first. Once my credit utilization rate was lower than 30%, I began to see an improvement in my scores.

2. Paid off collections accounts — Seeing my credit reports made me realize there was an old collection account that was on there. So I contacted the debt collector and paid it off. It’ll still be on my credit reports for a while (this could even be up to seven years from the date of my first missed payment on the account), but having a collection account reported as paid seems to have been a good step forward.

3. Set up autopay and payment reminders — It can be really easy to forget the due dates for your credit cards, especially if you’re traveling. Yup, that happened to me. If I’d had autopay set up on my accounts, I probably wouldn’t have missed those credit card payments. Now, I make sure autopay is set up on all my credit card accounts so that I’ll pay at least the minimum balance due each month.

4. Paid bills more than once in a cycle — I now treat my credit cards like debit cards and pay off any balances as soon as they process. Paying my balances more than once per billing cycle is a strategy that has helped reduce my credit utilization rate.

Everyone is different, but I know in my case, it really took seeing my credit scores and credit reports and being aware of what my credit situation was in order to be motivated to make change. My credit-building journey is far from over, but today, I’m no longer ashamed of those three little numbers that make up my scores.

Bottom line

Credit scores can be confusing and intimidating. But a little education and strategy can help you on your credit-building journey. Having an educational tool that shows what’s going on with your credit can be especially helpful.

And, it’s important to remember that building your credit is truly a journey — you may not see all the progress you want within a few days, weeks or months. But keep at it — you’ve got this!

Methodology

To learn about the credit-building habits of our members, Credit Karma surveyed 2,541 members who joined Credit Karma between January 2016 and December 2018, and who joined Credit Karma with a TransUnion Vantage 3.0 credit score in the deep subprime (<580) and subprime (580 to 639) ranges. These members saw improvements to their credit score of 50 to 99 points or 100+ points between signup and their score as reported in June 2019. Scores were last pulled in June 2019.