Top 10 states with largest quarterly debt increases

Thanks to the variety of financing options out there, it's become much simpler for Americans to get what they want, right when they want it.

The catch is that this convenience comes at a hefty cost.

In the third quarter of 2023, household consumer debt across the nation hit a new record high of $17.29 trillion, according to the latest data from the Federal Reserve.

That’s nearly double the debt households held just over a decade ago.

But the pace at which households are piling up debt isn't even across the nation. Some states are more prone to debt binging, while others are taking it easy.

Creditnews crunched the latest data from the Federal Reserve, the U.S. Census Bureau, and TransUnion, comparing all 50 states to identify those with the highest levels of debt accumulation.

Key Findings

Hawaii

In the third quarter of 2023, Hawaiians saw their debts soar, hitting an average of $1,093 per household. And there are a couple of reasons why.

Hawaii is a beautiful paradise, but it's also geographically isolated, making housing, groceries, and transportation more expensive.

Furthermore, Hawaii’s economy relies heavily on tourism. So when tourism-halting Covid or natural disasters like the Maui wildfires strike, the impact on the local economy can be brutal.

Job opportunities are also not as diverse as on the mainland, with local people having fewer choices and limited income prospects.

That means more residenrts have to turn to credit when facing financial crises such as job losses or unexpected expenses.

California

For the same quarter, California landed itself in the second spot for the biggest debt increase, reaching a hefty $988 per household.

Now, why’s that?

California might be a dreamy place to live, but it also comes with a hefty price tag. Limited housing, high demand, and strict zoning rules all inflate the costs of living.

Many residents, therefore, often resort to debt to rebuild their lives after natural disasters like wildfires, earthquakes, and droughts in California.

Colorado

While Colorado takes the cake with the lowest obesity rate in the nation, when it comes to financial fitness, it’s a different story.I

In the third quarter of 2023, Colorado families found themselves dealing with a significant bump in debt, with an average of about $978—marking the third-largest spike in the whole country.

Colorado also has the nation’s sixth-highest debt-to-income ratio, ranking behind Utah and ahead of South Carolina.

Part of the reason is that the state has some of the highest housing debt, highest credit card debt, and student debt levels

Methodology

In order to ascertain the states experiencing the most significant increases in aggregate debt between the second quarter (Q2) and third quarter (Q3) of 2023, we conducted an analysis utilizing the most recent data on consumer finances sourced from the Federal Reserve, TransUnion, and the the U.S. Census Bureau. All numerical figures have been adjusted for inflation.