As Americans we are contending with a staggering amount of debt that threatens to swamp many of us. The amount of money that people owe on borrowed money has risen by a strong 16% over the past decade—and the degree of debt already was concerning 10 years ago.
The biggest jump has been in car loans. The amount owing on them has skyrocketed by 71%. Auto loans are followed by student loan debt, which is up by a disturbing 56%. Mortgage debt is up 14%. Surprisingly, however, credit-card debt has grown by only 4% over the last 10 years.
These findings are revealed in a comprehensive look at the nation’s debt by travel company Upgraded Points. The study details how American debt has changed over the last decade. It also analyzes which states and regions are most impacted by credit-card debt, student loans, mortgages, and medical bills. The company says its exhaustive study was based on data from a wide variety of sources, including the Federal Reserve Bank of New York, the Organization for Economic Cooperation and Development, the Urban Institue, Zillow, and many more.
Medical debt
The most alarming part of the study is not just the number of Americans who owe large amounts of money on their medical bills, but those who are in collections for the money that they owe.
The average amount for the entire country is a crushing $678.72. Because this is an average amount, it means that for many people the debt is far higher.
Indeed, in the state of Wyoming the average amount of medical debt that is in collections amounts to a staggering $1,515. Hawaii has the lowest number in this regard at $339.
When it comes to failure to pay back medical debts, West Virginia earns low marks because, when measured against all 50 states, it has the highest percentage of its population who are in collections for their medical bills.
Southern states
Most of the Americans who are suffering with medical debt live in the southern states, the study shows. Not only have they accumulated a large amount of medical debt, but they also can least afford to pay off the debt. The reason is that, on average, they earn less and medical bills absorb a bigger part of their income than is the case in other states.
Those states that are home to a higher number of medically insured people tend, not unexpectedly, to have far less uncollected medical debt than those states that have a larger number of uninsured. For example, fewer than 3% of residents of Massachusetts are uninsured. As a result, the state ranks in third place when measured by the medical debt that is in collections.
Similarly, Texas is in fifth place when it comes to collections for medical debt; 18% of residents in the state are without medical insurance.
Student loan debt
When it comes to student-loan debt, the growth in the amount of money owed is out of proportion to other kinds of debt. At the top of the list in growth of outstanding student loan debt is Nevada, with an astonishing 94% increase in loans over the last decade. That amount is far in excess of the average increase of 56% across the country. North Carolina and Georgia are ranked in second and third places.
In Alaska, by contrast, student loan debt grew by only 17% over the last decade.
When measured against the income of people in the state, Mississippi has the highest ratio of student debt-to-income at 43%.
When measured against the total population of the state, Pennsylvania is home to the biggest percentage of residents of all the states who are suffering under student loan debt at 19%.
Housing debt
In sharp contrast to the average increase of 14% in mortgage loans for the country, housing debt grew the most in North Dakota, at a staggering 63%.
Hawaii is home to the most expensive houses in the country, whereas residents of Washington D.C. are suffering under the highest mortgage debt at an average of $75,280 for each homeowner in the district.
When it comes to the value of homes as well as the amount of mortgage debt owing on those homes, five states are in the top 10. They are: Colorado, California, Washington, Hawaii, and Utah.
Credit card debt
The study reveals a clear link between income and credit-card debt.
Those who live in wealthier states tend to have higher credit scores and, likely as a result, take on more credit-card debt overall. Those whose homes are in less wealthy states, however, tend to take on more credit card debt when it is measured against the amount of money that they earn.
Leading examples of this trend are:
• Residents of Alaska, which is regarded as a wealthier state, has the most credit card debt per person, averaging around $4,070.
• In Florida residents have the toughest time paying off their credit-card debt because the average amount carried by residents comes to 6.2% of their income.
• New York has an average credit-card debt of $3,520 for each resident, an average credit score of 712, and a ratio of debt-to-income of 5.54%.
• California has an average credit-card debt of $3,330 for each resident, an average credit score of 709, and a ratio of debt-to-income of 5.54%.
• Ohio has an average credit-card debt of $2,620 for each resident, an average credit score of 695, and a ratio of debt-to-income of 4.77%.
• Texas has an average credit-card debt of $3,190 for each resident, an average credit score of 674, and a ratio of debt-to-income of 5.75%.
