U.S. states with the most and least debt

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In a Nutshell

Debt is a fact of life for people all over the U.S. However, residents in some states have much more debt than others — and in some states, people index higher on certain types of debt, according to a recent Credit Karma analysis.

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Total debt per capita in the U.S. was $48,800 at the end of 2017, according to the Federal Reserve Bank of New York. The state or region where people hold the most debt is Washington, D.C. — while the state with the lowest debt is West Virginia.

To determine which state’s residents has the most debt in the nation, we ranked states by their debt-to-income ratios — that is, each state’s total debt per capita divided by residents’ median incomes. In general, the higher the ratio, the harder it might be for residents in a state to pay down their debt.

Looking at debt-to-income ratio versus total debt alone can give a more complete debt picture for each state’s residents because it measures residents’ ability to manage their debt, not just their total debt load. (Learn about our methodology.)

See below for states where residents have the most — and least — debt as determined by their debt-to-income ratios, along with a look at how the debt burden breaks down in each state.

Want to know more?

Key findings

Residents of Washington, D.C. have the highest debt-to-income ratio at 1.09, meaning that overall people in D.C. have 9% more debt than their income can cover. This area also has the highest total debt per capita at $84,380, according to the Federal Reserve Bank of New York.
West Virginia has the lowest debt-to-income ratio, at 0.65, meaning that overall West Virginians make about 35% more money than they owe. This state also has the least total debt per capita at $28,790, according to the Federal Reserve Bank of New York.
In states with the highest debt-to-income ratios, mortgage debt makes up a much higher percentage of residents’ total debt compared to other forms of debt.
In states with the lowest debt-to-income ratios, residents have a higher percentage of credit card debt compared to residents in states with the highest DTI.
Overall, Washington, D.C. has more than 3x more total debt per capita than West Virginia.

States where residents have the most and least debt

The map below shows total debt per capita in each state, based on data from the New York Federal Reserve at the end of 2017. Washington, D.C. has the highest debt per capita at $84,380, followed by Hawaii with $71,170 and California with $70,100 in total debt per capita.

A graph that shows a map of the U.S. breaks down total debt per capita, showing that Washington, D.C. has the most debt and West Virginia has the least.

Total debt per capita is only part of the picture, though. If people are making more than enough money to cover all that debt, then the actual debt burden for residents in that state isn’t all that bad. For example, Maryland’s total debt per capita is $70,010 — the fourth highest in the nation — but that state’s median income is also higher than any other state, according to the U.S. Census Bureau’s 2017 5-Year American Community Survey, making the debt-to-income ratio 0.89. Therefore, the debt burden is not as heavy.

That’s why looking at debt-to-income ratio can give us a much better understanding of each state’s debt — it not only captures a state’s residents’ total debt, but also residents’ ability to manage that debt with the income they have.

Here are the 10 states in the nation with the highest debt-to-income ratios:

10 states where residents have the most debt, ranked by DTI

Rank State (including D.C.) Total debt per capita Median individual income Debt-to-income ratio
1. Washington, D.C. $84,380 $77,649 1.09
2. Colorado $68,450 $65,458 1.05
3. California $70,100 $67,169 1.04
4. Arizona $51,300 $53,510 0.96
5. Hawaii $71,170 $74,923 0.95
6. Virginia $65,050 $68,766 0.95
7. Washington $62,560 $66,174 0.95
8. Oregon $53,020 $56,119 0.94
9. Nevada $50,320 $55,434 0.91
10. Idaho $46,270 $50,985 0.91

Sources: Federal Reserve Bank of New York, U.S. Census Bureau

A line graph visually represents income vs. debt in the states with the highest debt-to-income ratios

In other states, median income outweighs total debt per capita — meaning that, in theory, residents there have a lighter overall debt burden. West Virginia is the state with the lowest debt, according to New York Federal Reserve data, with a total debt per capita of $28,790. It also has the lowest debt burden.

Here’s how the states rank when you look at those with the lowest debt-to-income ratios:

10 states where residents have the least debt, ranked by DTI

Rank State Total debt per capita Median individual income Debt-to-income ratio
1. West Virginia $28,790 $44,061 0.65
2. Kansas $37,320 $55,477 0.67
3. Oklahoma $33,890 $49,767 0.68
4. Iowa $38,920 $56,570 0.69
5. North Dakota $42,230 $61,285 0.69
6. Wisconsin $39,120 $56,759 0.69
7. Nebraska $39,400 $56,675 0.70
8. Ohio $37,160 $52,407 0.71
9. Indiana $37,210 $52,182 0.71
10. Michigan $37,640 $52,668 0.71

Sources: Federal Reserve Bank of New York, U.S. Census Bureau

A line graph visually represents income vs. debt in the states with the lowest debt-to-income ratios

What’s the debt breakdown in states with the most and least debt?

Not all debt is created equally. For example, mortgage loans can make up a large portion of a person’s overall debt, but it’s considered good debt as long as you get a mortgage that’s within your means. On the other hand, revolving debt — like credit cards or auto loans — can be considered a bad form of debt.

We found that states where residents have the most debt tend to have a higher percentage of mortgage debt, while states where residents have the lowest debt were more likely to index higher on other types of debt, such as auto loans, credit cards and student loans.

For example, according to the Federal Reserve Bank of New York, Washington, D.C.’s average mortgage debt was $62,080 at the end of 2017, or 74% of total debt for people who live there.  By comparison, West Virginia, the state with the least debt, spent less on mortgage debt in Q4 2017 — just 53%.

At the same time, 16% of West Virginians’ debt was for auto loans, four times as much as in Washington, DC, where auto loans were just 4% of total debt.

Two pie charts breakdown total debt in Washington, D.C. and West Virginia


Tips to pay down debt

No matter where you live or what type of debt you have, paying it down can be tough. If you’re having trouble managing your debt, you’re not alone. Here are a few things to try:

Create a budget and stick to it

Planning and writing down a monthly budget can be key to getting on top of your debts. Just be realistic about your spending habits and limitations, and revisit and adjust your budget as needed.

Consolidate your debt

This can help if you’re juggling multiple payments on several high interest loans, like credit cards. One way to consolidate all that debt is by taking out a personal loan, which can come with lower interest rates than credit cards. But keep in mind that this type of loan generally only makes sense if you’re able to get a lower interest rate on your loan than you’re paying across your existing debts.

You can also consolidate your high-interest debt using a balance transfer credit card. These types of cards often offer an introductory 0% interest rate for balance transfers during a promotional period, allowing you to put more money toward paying down your principal and less toward interest.

Consider all your options as you look for the right solution for your situation.

Cut small expenses

Think about those streaming services like Spotify, Netflix or Hulu. Are there any mobile apps or other monthly subscriptions you don’t need? If you only use them occasionally, you might want to cancel.

Canceling a single monthly subscription of $10.99 could save you around $132 over the course of a year, freeing up more money to pay down debt. You might also consider free weekend activities instead of big dinners or outings, or other cost-cutting ideas.

These expenses might seem small, but they can add up over time. You might be surprised how much financial breathing room you can create for yourself by cutting them out of your budget.  


Methodology

To determine which states have the highest and lowest debt, we examined the New York Federal Reserve’s total debt per capita data from Q4 2017, the most up-to-date data available. To calculate debt-to-income ratio, we divided the total debt per capita for each state by the median individual income in each state as determined by the U.S. Census Bureau’s 2017 5-Year American Community Survey.