The combined debt of US households has risen to $17.3 trillion, largely due to rampant credit card spending.
But new analyzes have identified the states where debt is rising the fastest – and slowest – while Hawaii is performing the worst.
According to personal finance website WalletHub, the average household in the Aloha State added $1,093 to their debt between the second and third quarters of the year. The third quarter runs from July 1 to September 30.
It means they now have an average of $260,299 in debt – a figure that includes credit card balances, mortgages and car loans.
This was followed by California, Colorado and Utah, where household debt rose by $988, $978 and $932, respectively, over the same period.
The combined debt of US households has risen to $17.3 trillion, largely due to rampant credit card spending
Combined US household debt rose by $228 billion to $17.3 trillion in the third quarter of this year, new figures show.
In fifth place is Washington, where the average family unit has $219,541 in debt — up from $922 in the last quarter.
By contrast, West Virginia residents are seeing theirs rise at the slowest pace of any U.S. state. On average, residents added $375 to their debt between July and September, bringing their total to $89,203.
Mississippi, Oklahoma, Kentucky and Arkansas have also benefited from slow debt growth.
The average household in these states all added less than $500 in the last financial quarter. Their entire debts are also all under $102,000.
Researchers noted that Hawaii likely struggled the most due to its high cost of living.
The report says: ‘This can make it challenging for residents to make ends meet, leaving many dependent on credit and loans to cover the costs of housing, groceries, transport and other essentials.
“Hawaii’s economy is heavily dependent on tourism, making crises like the COVID-19 pandemic and the recent Maui wildfires far more devastating to their financial security.”
Meanwhile, experts said Californians were likely struggling with the expensive housing market.
California is also prone to natural disasters, such as wildfires, earthquakes and droughts. Recovering from such events can be costly, causing some residents to take on debt to rebuild or repair their homes and lives,” the report said.
The Federal Reserve announced today that interest rates will remain at their current level between 5.25 and 5.5 percent
The announcement means households will once again get a reprieve from the brutal rise in borrowing costs
Borrowing costs are now at their highest levels in decades, following an aggressive campaign of rate hikes by the Fed.
At last week’s meeting, officials unanimously agreed to keep interest rates stable at their current level between 5.25 and 5.5 percent.
However, it still represents a more than fivefold increase in interest rates in April 2020, when they were at a record low 0.5 percent.
This increase in Fed rates has had a well-known effect on mortgage rates, auto loans, and annual interest rates on credit cards.
According to government-backed lender Freddie Mac, the average interest rate on a 30-year fixed-rate home loan is now 7.76 percent.
But despite these higher costs, experts have been surprised by the resilience of consumer spending in the U.S. economy.
US GDP grew 4.9 percent between July and September – the fastest pace in almost two years.
Separate figures from the Commerce Department’s Bureau of Economic Analysis show that consumer spending – which makes up two-thirds of economic activity – rose 0.7 percent.