Delaware, Rhode Island residents have most debt
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Americans are still up to their ears in consumer debt, with Delawareans topping the list with an average per-person debt load of a whopping $20,233, a report by debt relief company CareOne Services shows.
The company ranks the 10 states with the highest and lowest average consumer debt levels based on a survey of 135,000 people enrolled in debt management programs in 2009 and 2010. Most alarmingly, it found that even those in California — the state with the lowest debt level — carry more than $12,000 in debt; in fact, residents in all states still carry an average debt load of more than $10,000.
But debt-plagued consumers might not be who you think there are, says Mike Croxson, president of CareOne. He says the typical person calling for help is a female in her mid-30s with a household income of about $37,000 and some college education. Sixty percent of the time she’s a homeowner.
“These are average, hard-working American people who have been juggling their finances — and then something happens,” says Croxson. “Someone loses a job, they get divorced, their car engine blows up. All the balls that were up in the air drop. They have no clue how to pick them up.”
The root of debt accumulation usually stems from one of these three things, he says: people using credit as a gap-filler instead of adjusting their standard of living; using a credit card to pay for an emergency but never fully paying down the balance; or “chronic unconscious incompetence,” a vicious cycle of spending without ever thinking of the consequences.
“People just do what they’ve always done — they spend and they pay, they spend and they pay and they don’t really know what they’re doing,” Croxson says.
Here are some signs you might be in over your head:
You’re “robbing Peter to pay Paul.” If you’re using your Visa to pay off your MasterCard, or if you need to dip into a line of credit to make ends meet, it’s time to take a step back to examine your situation.
You feel out of control. It’s simple enough: constant worry about how you’re going to pay your bills or make ends meet signal a problem.
Your life hits a speedbump because of money. The death of a family member, sudden job loss or major medical emergency are all enough to throw your financial well-being into a tailspin. “If your life gets disrupted because of your income, there’s a good chance you need to speak with someone,” Croxson says.
How did your home state stack up? Here’s a look at where the debt is piling up:
10 states with the highest average consumer debt in 2010
| State | Average Consumer Debt | Average Number of Creditors | Average Credit Score |
|---|---|---|---|
| Delaware | $20,233 | 7 | 576 |
| Rhode Island | $20,130 | 7 | 593 |
| Maine | $19,454 | 6 | 610 |
| Alaska | $19,225 | 6 | 591 |
| Colorado | $18,811 | 6 | 592 |
| South Dakota | $18,707 | 7 | 587 |
| North Carolina | $18,536 | 6 | 586 |
| Connecticut | $17,334 | 6 | 595 |
| Wisconsin | $16,903 | 5 | 611 |
| Alabama | $16,591 | 7 | 579 |
10 states with the lowest average consumer debt in 2010
| State | Average Consumer Debt | Average Number of Creditors | Average Credit Score |
|---|---|---|---|
| California | $12,801 | 5 | 597 |
| Michigan | $13,328 | 5 | 591 |
| Mississippi | $13,512 | 6 | 581 |
| Vermont | $13,709 | 5 | 606 |
| Missouri | $13,737 | 6 | 590 |
| Indiana | $13,945 | 5 | 599 |
| Kentucky | $14,028 | 6 | 590 |
| Iowa | $14,099 | 5 | 600 |
| Virginia | $14,194 | 5 | 586 |
| Tennessee | $14,222 | 6 | 589 |
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These charts just go to show how worthless credit scores are.
The government reported that consumer spending rose at a 4.4 percent rate in the final three months of 2010 — the most since 2006 and helping retailers to the best holiday shopping season in that time, even though the disposable income is really not there. Spending money we really should be saving is exactly what retailers need and want us to do, as 2/3 of our economy depends on consumer spending. The problem is that the boost will be short-lived without real job growth. I am certain that this will all end badly if our attitudes towards incomes and spending does not become more conservative. Americans memories are short lived, and we tend repeat these errors and bad habits over and over again.
Where is Pennsylvania. Pennsylvania is always so average. Almost every list I see of the states, we are directly in the middle somewhere.
minipaws. The credit score shows your ability to pay off your debt on schedule. Debt is not a bad thing as long as you are not over-your-head in debt like the US government and some women with credit cards.
Quit calling us consumers, it’s an insulting term! Oh, by the way, know where I can find a bargain on a home theater system?
Given yesterday’s article about even women doctor’s making less money than their male counterparts, why is anyone surprised that women are the “average” debtor? Ignore flippant comments about women with credit cards. In spite of recent legislation, women are still paid less than men, yet the debts and burdens of childcare are so often solely theirs. I am not saying there are not responsible fathers out there, only that I believe a deeper look might show that credit cards are more and more frequently paying for basic necessities, especially in these tough economic times. I for one would have appreciated a deeper analysis of what these debts represent, as well as a departure from reporting “averages,” which can be statistically misleading. Take as evidence how closely the numbers align between the Top 10 and Bottom 10 states listed in this article.
Nice Observation minipaws !!
Debt is a consumer product to be sold. The ideal customer pays at high interest over a long period of time. One’s credit rating is a measure of appeal as a potential debtor and nothing else. It’s simply tool prepared by a few companies to help lenders sort out customers by risk factor.