A new study has revealed the states where residents have the most personal debt, and New York and Connecticut are top 20.
Credit card debt alone in the United States stands at more than $1 trillion and is only set to rise in 2024. Inflation on essentials and luxuries alike is one of the drivers of personal debt; along with student loan debt (more than $1.7 trillion), even as the Biden Administration moves forward with new student loan forgiveness initiatives; and auto loan debt (more than $1.5 trillion).
Research by banking experts at CreditDonkey analyzed the average mortgage debt, student debt, automobile debt and credit card debt in every state. Each metric was ranked out of 10, with the higher the amount of debt the closer to 10. Each state was then given a score out of 40, the higher the number indicating the more debt a state has.
California has the most personal debt, followed by Hawaii; Maryland, which has the most student debt; Alaska; Colorado; Washington; Virginia; Georgia; Texas; and Nevada.
While New York and Connecticut missed the top 10, their numbers are enough to earn them spots at Nos. 14 and 17 respectively. The Empire State, with a population of 20,201,249, has $271,284 in average mortgage debt; $37,989 in average student debt; $19,090 in car debt; and $6,269 in average credit card debt for an index score of 30.65. The Nutmeg State, with a population of 3,605,944, has an average mortgage debt of $242,139; an average student debt of $36,055; an average auto debt of $18,491; and an average credit card debt of $6,825, for an index score of 30.05.
Said Anna Ge, CreditDonkey’s director of research:
“The rise of debt in America is a multifaceted story, reflecting the evolving dynamics of the economic landscape. 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 home-ownership aspirations and the challenges of rising costs across the board.
“The ease of access to credit, while providing immediate relief, has contributed to a culture where spending can outpace income. 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 health care 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.”
