States See Sharp Rise in Consumer Debt

Americans are carrying more debt than ever, and in some states, balances are rising faster than in others.

According to a new WalletHub report, States Where Consumers Are Adding the Most Debt, U.S. households added $257 billion in total debt during 2025, an increase that is 810% higher than the growth recorded in 2024. In total, Americans owe more than $2.9 trillion on auto loans and credit cards alone. This report comes on the heels of the company's Household Debt Report.

WalletHub analyzed proprietary data to determine where credit card, auto loan, and personal loan balances increased the most from the third to the fourth quarter of 2025. The findings highlight regional differences in how consumers are managing rising costs and high interest rates.

"Maine residents added the most debt than those in any other state, at least in percentage terms," said John Kiernan, WalletHub editor. He noted that the average credit card balance in Maine rose by 8% from Q3 to Q4 2025, one of the largest increases nationwide. Auto loan and personal loan balances also rose significantly in the state.

Largest increases

1. Maine

2. Wyoming

3. Hawaii

4. Montana

5. Georgia

6. New Mexico

7. North Dakota

8. Florida

9. Texas

10. Vermont

Smallest increases

41. Michigan

42. Kentucky

43. Ohio

44. New Hampshire

45. Connecticut

46. Iowa

47. Missouri

48. Delaware

49. Oregon

50. West Virginia

Nationally, the average household owed $155,594 at the end of 2025, which is $11,639 below the all-time high. Despite the rapid increase in total debt, broader indicators suggest consumers remain in a relatively stable position. The total household debt-to-deposits ratio is still below pre-Covid levels and roughly 47% lower than its early-2000s peak. The total debt-to-assets ratio stands at 9.28%, a level considered healthy by historical standards.

Even so, experts caution that high interest rates make new borrowing riskier.

"At a time when interest rates are very high, it's especially important to minimize the accumulation of debt," Kiernan said. "Americans have added a staggering amount of new debt in the past decade, and it can be very easy for that debt to become unsustainable."

Colin Slabach, clinical assistant professor at New York University, said debt often grows out of cash-flow mismatches, irregular income, or unexpected financial shocks such as medical bills or car repairs. Easier access to credit and buy-now-pay-later options can also normalize borrowing for everyday expenses.

"To minimize debt accumulation, create a 'rainy day fund,'" said Dr. Sandra Poirier, professor at Middle Tennessee State University, who recommends saving up to six months of income in a high-interest savings account.

Raymond Kowalczyk, professor at Illinois Central College, added that consumers should be intentional about how they use credit. "Whenever possible, use debt to pay for assets … not expenses," he said.

As borrowing continues to rise, the difference between manageable and unsustainable debt may come down to preparation, discipline, and how quickly households adjust to changing economic conditions.

Click here for the full report here.