The study examined various financial factors, including personal and business bankruptcies, credit scores, total consumer debt, and debt per capita.
By Stacy M. BrownNNPA Newswire Senior National Correspondent@StacyBrownMedia
As the holiday season kicks off with Thanksgiving, Black Friday, and Christmas shopping, a new study by MarketWatch Guides has identified the states with the highest consumer debt levels. The District of Columbia is top of the list, with an average debt per capita of $166,186.
The study examined various financial factors, including personal and business bankruptcies, credit scores, total consumer debt, and debt per capita. Elevated costs of living, significant student loan burdens, and reliance on high-interest loans fuel D.C.’s high debt levels. Additionally, the District leads the nation in student loan debt per borrower, averaging $54,145.
Colorado and Washington State rank second and third, with average debts of $154,481 and $150,462, respectively. Rising housing costs are a significant contributor in both states. In Colorado, areas like Denver have seen a booming housing market, driving up mortgage borrowing. In Washington, urban centers such as Seattle present similar challenges, with residents grappling with expensive housing and education costs.
Other states with high debt levels include California and Hawaii, with per capita debts of $148,428 and $147,103, respectively. Both states face high living costs and significant housing affordability issues that increase borrowing.
The study also sheds light on broader trends across the U.S. Indiana leads the country in credit card ownership, with an average of 4.7 credit cards per person, well above the national average of 3.9. Alabama has the highest rate of personal bankruptcies, with 352 filings per 100,000 residents, followed by Mississippi with 287 and Tennessee with 267.
Business bankruptcies are most prevalent in Delaware, which reported 122 filings per 100,000 residents, more than eight times the rate in New Jersey, the state with the second-highest rate at 14 per 100,000. Delaware’s business-friendly laws and many corporate registrations contribute to its elevated bankruptcy figures.
Student loan debt continues to weigh heavily on borrowers nationwide. After D.C., Maryland has the second-highest average federal student loan debt per borrower at $43,297, followed by Georgia at $41,651. These figures reflect graduates’ financial strain in states with high tuition costs and professional job markets that often require advanced degrees.
According to the Federal Reserve Bank of New York, household debt in the U.S. has reached a record $17.8 trillion. This includes mortgages, credit cards, auto loans, and student loans, underscoring many Americans’ financial challenges as holiday spending accelerates.
