Key takeaway
This study is an illustrative model, not a survey. One standardized debt ($6,600 at 22% APR, minimum = max(2% of balance, $25)) is run through a monthly amortization simulation, then the first month's $132 minimum payment is compared against each state's 2026 minimum wage. The payoff result — 1,135 months, $61,019.47 in interest — is identical for every state; only the burden varies. No state-level figure is hardcoded or estimated: every number is recomputed from the inputs below.
Standardized debt assumptions
| Input | Value | Source |
|---|---|---|
| Starting balance | $6,600 | National average revolving balance per borrower: ~$6,300 (TransUnion, Q1 2026 Industry Insights) and $6,659 (Experian, March 2026). Figures retrieved via web research 2026-09-28. |
| APR | 22% | Rounded from 22.15%, the Federal Reserve G.19 Consumer Credit average for credit-card accounts assessed interest, Q2 2026. Rounding disclosed here; it changes the payoff timeline by a matter of weeks, not years. |
| Minimum payment | max(2% of outstanding balance, $25) per month | A standard industry minimum-payment formula. Applied monthly until the balance reaches zero. |
| Interest accrual | APR ÷ 12 per month on the declining balance | Monthly periodic rate of 1.8333%. |
Additional modeling assumptions: no new purchases, no annual fees, no late fees, no penalty APR, payments credited once per month.
Payoff simulation
Starting from $6,600 at 22% APR, each month the model adds one month of interest (balance × 0.22 ÷ 12), subtracts the minimum payment (max(2% of balance, $25)), and repeats until the balance is zero. The final month's payment is the remaining balance plus that month's interest.
- Time to payoff: 1,135 months (94.6 years)
- Total interest: $61,019.47
- Total paid on the original $6,600: $67,619.47
- First month's minimum payment: $132.00 (identical in every state)
State wage data
Minimum wages are the standard (non-tipped) rates from the U.S. Department of Labor, Wage and Hour Division, Consolidated Minimum Wage Table, effective July 1, 2026, retrieved 2026-09-28. Where a state has no minimum wage or sets one below the federal rate, the federal $7.25 applies (per the DOL: employers covered by the FLSA must pay at least the federal minimum).
States with more than one listed rate use the standard statewide rate; the alternatives are footnoted here:
- Montana $10.85 — the table lists $10.853 (shown as $10.85); the $4.00 rate for very small non-FLSA businesses is not used.
- New Jersey $15.92 — the $15.23 rate for employers with fewer than 6 employees / seasonal employment is not used.
- New York $16.00 — the rest-of-state rate; New York City, Nassau, Suffolk, and Westchester counties are $17.00.
- Ohio $11.00 — employers with annual gross receipts under $405,000 may pay $7.25; the standard rate is used.
- Oregon $15.55 — the standard rate; Portland metro is $16.80 and nonurban counties $14.55.
Note: the DOL page's explanatory prose still says "The District of Columbia has the highest minimum wage at $17.50/hour," but the table itself — the authoritative figure — lists DC at $18.40. The table value is used.
The burden metric
For each state:
- Monthly full-time gross pay = minimum wage × 40 hours × 52 weeks ÷ 12
- Burden = first month's minimum payment ($132.00) ÷ monthly full-time gross pay, expressed as a percentage
States are ranked deepest-burden first (highest burden). Twenty states share the $7.25 federal floor and therefore tie for the highest burden (10.50%). The District of Columbia ($18.40) is included as a 51st, clearly labeled reference row; it is not ranked with the states.
What the study does and does not claim
- Payoff timeline, total interest, and total paid are identical in every state. The debt math does not vary by geography. Only the burden — the minimum payment's share of a minimum-wage paycheck — varies. The study does not imply otherwise.
- The burden metric uses gross pay, not take-home pay. After taxes, the bite is larger.
- "Full-time" means 40 hours/week, 52 weeks/year. Many minimum-wage workers work fewer hours; their burden would be higher.
Limitations
- Minimum-payment formulas vary by issuer. Many cards use "1% of balance plus interest and fees" (often with a $25–$35 floor) rather than 2% of balance. That formula pays down principal faster and would produce a shorter timeline and less total interest. The 2%-of-balance formula is a common standard, but your card's agreement governs your actual minimum.
- One standardized balance. Real balances vary widely; the $6,600 average anchors the study to a documented national figure rather than a round number.
- No local minimum wages. Several cities and counties (e.g., New York City, Seattle, San Francisco) set minimums above their state rate. The study uses state-level figures only.
- Non-tipped rates only. Tipped minimum wages are lower in many states and are not modeled.
- Static snapshot. Wages and rates change; figures reflect sources current as of September 2026.
- Minimum-wage workers are not the only revolvers. The study isolates the burden for full-time minimum-wage earners as an illustrative benchmark, not a claim about who carries credit-card debt.
Reproducibility
The simulation is a straightforward monthly amortization loop (Python, ~40 lines): accrue interest at APR/12, pay max(2% × balance, $25), stop when the balance clears. Any analyst can reproduce the 1,135-month / $61,019.47-interest result from the inputs above. The full dataset is available as a CSV.
Published: September 28, 2026