As Thanksgiving, Black Friday, and Christmas kick off the holiday shopping season, new research has revealed troubling consumer debt levels across the United States, with the District of Columbia leading the nation.
A study conducted by found that D.C. residents carry an average debt per capita of $166,186, driven by high costs of living, significant student loan burdens, and widespread reliance on high-interest loans.
The study, which analyzed factors such as personal and business bankruptcies, credit scores, total consumer debt, and debt per capita, paints a sobering picture of financial strain.
The District鈥檚 position at the top of the debt rankings reflects its unique economic environment. Jobs in law, policy, and government fields often require advanced degrees, contributing to D.C.鈥檚 status as the leader in student loan debt per borrower, with an average of $54,145.
In 2022, Council member Janeese Lewis George (D-Ward 4) noted the further disparities in the District regarding student debt.
鈥淚n D.C., where we have the most student debt per borrower in the nation, Black communities face the greatest student debt burden 鈥 we forfeit more of our pay to student loan repayment,鈥
Colorado and Washington state ranked second and third in consumer debt, with per capita averages of $154,481 and $150,462, respectively. In Colorado, cities like Denver are experiencing a housing market boom, driving up mortgage and rental costs and forcing many residents into deeper debt.聽
Similarly, Washington state鈥檚 high living costs in urban areas such as Seattle and significant borrowing for housing and education have left residents struggling to balance their financial obligations.
The study also highlights trends in credit usage and bankruptcy rates nationwide. Indiana residents lead the nation with an average of 4.7 credit cards per person, far above the national average of 3.9. High credit card ownership can signal over-reliance on credit, a factor often associated with increased financial vulnerability.
Regarding personal bankruptcies, Alabama ranks first, with 352 filings per 100,000 residents, followed by Mississippi with 287 and Tennessee with 267.
Experts attribute these numbers to higher poverty rates and economic challenges in these states. Business bankruptcies, another key measure in the study, are most prevalent in Delaware, which recorded 122 per 100,000 people, significantly higher than second-ranked New Jersey at 14 per 100,000.
Other notable findings include Georgia ranking third for student loan debt per borrower, averaging $41,651, while Maryland ranks second at $43,297. These figures highlight the widespread impact of educational debt, particularly in regions with higher concentrations of prestigious universities and professional programs.
Meanwhile, states like California and Hawaii also feature prominently on the list of high consumer debt states, with per capita debts of $148,428 and $147,103, respectively. Both states face housing affordability crises and high living expenses contributing to elevated borrowing.
According to the Federal Reserve Bank of New York, total household debt has reached an unprecedented $17.8 trillion nationwide.
鈥淭his rising tide of debt underscores the financial challenges facing millions of Americans, particularly as holiday shopping encourages increased spending,鈥 said Deron Simms, a D.C.-based financial adviser. 鈥淎mericans everywhere should take a breath and understand there could be serious consequences attached to having so much debt.鈥