Where U.S. Residents Are Struggling the Most With Debt

A new study from CreditDonkey has revealed that the Golden State of California is the state where residents have the most personal debt.

Research by CreditDonkey’s banking experts analyzed the average mortgage debt, student debt, automobile debt and credit card debt in every state. Each metric was given a ranking out of 10, the higher the amount of debt the closer to 10. Each state was then given a score out of 40, the higher the number the more debt a state has.

“The rise of debt in America is a multifaceted story, reflecting the evolving dynamics of the economic landscape,” said Anna Ge, Director of Research at CreditDonkey. “As the nation has grown, so too have the complexities of the financial systems. The causes for the surge in debt are rooted in a confluence of factors–from the pursuit of higher education to homeownership aspirations and the challenges of rising costs across the board.”

The top 10 states were as follows:

1. California
Californians are in the most debt according to data. California has the highest average mortgage debt with $422,909 per household. This could be attributed to the fact that California has some of the highest house prices in America, meaning that many people may need to take out larger mortgages to live there. Having a car in many places in America is also a necessity and thus many people may have vehicle debt, in California this averages at around $23,262 which is one of the higher figures across the states.

2. Hawaii
Hawaii is the state with the second most debt. On average, Hawaiians have around $6,343 of credit card debt. Credit cards have become increasingly popular across the states, this is to fill in the gaps in purchasing power that occur when prices rise faster than income. As well as credit cards, there's been a huge increase in Buy Now Pay Later services so that people can afford things that they may not be able to pay for in one upfront lump sum. Hawaii also has high house prices, and so, much like California, has large average mortgage debt of $387,277.

3. Maryland
Maryland ranked third on this list. This state has the largest student debt with the average being $43,116. Student debt has continued to rise across the states with college costs increasing long with the general cost of living people need to borrow more. On top of this for many who can’t pay off enough or their balance, interest is causing many peoples loads to continue to rise even after college. Maryland also has high average car debt at $22,809.

4. Alaska
Alaska is fourth on this list, due to Alaska having the highest average credit card debt in America ($7,338). Currently, in America, the total credit card debt is over $1 trillion. This has been a continuous upward trend as Americans are being priced out due to drastic increases in costs. Alaskans also have high levels of automobile debt with the average being $25,846.

5. Colorado
The average mortgage debt in Colorado is $319,981 which is one of the higher figures across America. As well as having high mortgage debt, Colorado also has high average student debt at $36,939.

6. Washington
Washington ranks sixth on this list, Washington has average house prices of $563,000, which is 66% more than the national average. Due to this there is more mortgage debt in Washington ($331,658 on average). As well as mortgage debt, people in Washington have high levels of car debt, averaging $23,754.

7. Virginia
Virginia follows in the trend of having high levels of credit card debt with the average being $6,477. Virginia also has high average student debt with the average being $39,599. The student loan debt balance in the U.S. has increased by 66% over the past decade, and it now totals more than $1.77 trillion, according to the Federal Reserve.

8. Georgia
Georgia is eighth in this list. With an average of $41,775, Georgia has some of the highest levels of student debt, which is much above the average across all states which is $35,215. Georgia also has above-average credit card debt at $6,265 (average $5,706).

9. Texas
Texas is ninth on this list. More than 100 million Americans have a car loan, and auto loan debt in the U.S. currently stands at $1.5 trillion. Texas has the most automobile debt in America with an average debt of $27,739. Texans also have above-average credit card debt of $6,542.

10. Nevada
Nevada has the tenth highest levels of debt in America. The average mortgage debt across all states is $213,095; in Nevada, the average is above that at $275,352. Credit card debt is also above the average across all states ($5,706) standing at $6,176 in Nevada.

“The ease of access to credit, while providing immediate relief, has contributed to a culture where spending can outpace income,” added Ge. “This partly stems from consumerism, as many people are fueled by a desire for a higher standard of living, which has also played a role in credit cards becoming a ubiquitous financial tool. There are also more deep-rooted issues that are causing such drastic increases in debt, from rising costs of essentials such as gas and groceries, to healthcare and living expenses (rent and bills), as costs continue to rise many Americans are being pushed to the edge and require relief that inevitably results in the building up of debt.”