I already knew Donald Trump “loves the poorly educated” — and that they love him. But I didn’t really appreciate how much people with lousy credit love “the king of debt.”
Loan referral service LendingTree recently put out a study analyzing the credit reports of four million customers, offering a portrait of borrowing habits in 49 states. (They inexplicably ignored Nebraska.) I made an interactive map of it and indicated which way each state voted, along with the rank LendingTree gave. Check it out…
Only three states in the lower-performing half went for Clinton in the 2016 presidential election: New Mexico, Illinois, and Minnesota. None of the top 10 went for Trump.
The easy conclusion is that poor people voted for Trump because he promised better jobs and a fast-growing economy. But we know that most Trump voters were not working class — his greatest appeal was to the wealthy and people without college degrees, many of whom are middle class. I would argue that Trump voters are simply ignorant about a lot of things, money included — and how much of it they have doesn’t have a lot to do with how smart they are spending it.
The red-state struggle
You could argue Trump won more states, so of course he won more states that have poor credit. But LendingTree points to the averages: “The average credit score from consumers in ‘blue’ states was 681, substantially higher than the ‘red’ state average of 665. In fact, the ten states with the lowest average credit score are all considered ‘red’ states.”
The national average is 671. On the bright side, credit scores in general have improved by six points from the previous year. Trump can’t take credit for that, though: the period studied ran from April 2016 to March 2017.
Other factors played into LendingTree’s rankings: average credit card debt, average card balance, and the average number of credit cards. Not surprisingly, Clinton-voting states — with higher costs of living — had higher credit card debt.
“The average total credit card debt for ‘blue’ states is $6,702 while the ‘red’ states average $5,475 over the past 12 months. The national average total credit card debt is $5,936,” LendingTree notes. “Interestingly, the ten states with the highest average total credit card debt are all considered blue states.”
But the credit scores suggest they do a better job of managing that debt, possibly thanks to higher incomes.
“Southern states, for example, tend to carry less overall credit card debt but also have lower credit scores on average when compared to consumers in the northeast. Economic opportunities, cost of living and culture are all factors that contribute to the differences in consumer credit between ‘red’ and ‘blue’ states.” says LendingTree CEO Doug Lebda.
Another indicator: financial literacy
While it’s a bit dated now, here’s another interactive map I made in 2015…
This one uses data from the Champlain College Center for Financial Literacy, the Financial Industry Regulatory Authority, and the The National Financial Educators Council to rank states by how smart they are about managing money. In this case, the ranking is my own — and one of the biggest factors is whether states have laws requiring financial literacy be taught in high school.
By this metric, things are looking up for Trump-voting states. Utah, Idaho, Missouri, Tennessee, Louisiana and Georgia all made it to the top 10 based partly on their laws. But as LendingTree’s study makes clear, Southern states tend to struggle with understanding credit more — they have lower average scores on the financial literacy knowledge tests and correspondingly low average credit scores.
One conclusion I take away from this that Trump voters probably weren’t terribly concerned about his bankruptcies, taxes, charity chicanery. If you don’t understand the basics of money, you don’t fault other people for their financial mess — even if it may ultimately contribute to yours.
Article last modified on August 30, 2017. Published by Debt.com, LLC .