Consumer Debt in California
Consumers get themselves trapped into personal debt for all sorts of reasons – in many cases no fault of their own. And with today’s super high interest rates it’s no wonder why people feel overwhelmed with the amounts they owe.
Here’s some of the biggest reasons Californians are seeking debt relief.
- Credit cards with 25-35% interest rates
- Private student loans
- Medical and hospital bills
- Income loss (especially due to COVID)
- Medical issues causing work loss
- Divorce or separation
- Family expenses – birth, death, rehab, etc.
California is undoubtably one of the worst states to be in debt. The cost-of-living is estimated to be 33% higher than the national average, and typical rent prices are even higher than that.
Additionally, California has an 11-percent unemployment rate – the 3rd highest U.S. state in 2020; beaten only by Hawaii and Nevada. [1]
The upside for those living California are the many consumer debt protection laws and regulations. They’re an expansions on federal laws and are more advantageous for California residents with insurmountable debt. For example, one law outlines exactly when you can refuse to pay off a credit card bill.
If you’re overburdened by debt there’s a few options available.
- Debt consolidation plans
- Credit counseling
- Bankruptcy (should be a last-resort)
Credit Card Debt in California
When it comes to credit card debt, people in California are slightly above average vs. other U.S. states. In 2019 the average Californian carried $6,222 in credit card debt (with the nationwide average of $6,194). [2]
Credit Card Debt by U.S. State
| State | 2018 | 2019 |
|---|---|---|
| Alabama | $5,557 | $5,672 |
| Alaska | $7,974 | $8,026 |
| Arizona | $5,909 | $6,053 |
| Arkansas | $5,298 | $5,327 |
| California | $5,998 | $6,222 |
| Colorado | $6,273 | $6,416 |
| Connecticut | $6,893 | $7,082 |
| Delaware | $6,176 | $6,335 |
| District of Columbia | $6,896 | $7,077 |
| Florida | $6,236 | $6,460 |
| Georgia | $6,400 | $6,569 |
| Hawaii | $6,441 | $6,673 |
| Idaho | $5,102 | $5,213 |
| Illinois | $6,112 | $6,253 |
| Indiana | $5,174 | $5,254 |
| Iowa | $4,685 | $4,774 |
| Kansas | $5,719 | $5,769 |
| Kentucky | $5,060 | $5,140 |
| Louisiana | $5,712 | $5,811 |
| Maine | $5,143 | $5,442 |
| Maryland | $6,770 | $6,946 |
| Massachusetts | $6,022 | $6,213 |
| Michigan | $5,310 | $5,399 |
| Minnesota | $5,367 | $5,489 |
| Mississippi | $4,998 | $5,134 |
| Missouri | $5,544 | $5,601 |
| Montana | $5,383 | $5,482 |
| Nebraska | $5,308 | $5,423 |
| Nevada | $6,036 | $6,220 |
| New Hampshire | $6,094 | $6,235 |
| New Jersey | $6,907 | $7,084 |
| New Mexico | $5,804 | $5,851 |
| New York | $6,309 | $6,491 |
| North Carolina | $5,732 | $5,832 |
| North Dakota | $5,162 | $5,265 |
| Ohio | $5,494 | $5,560 |
| Oklahoma | $5,756 | $5,848 |
| Oregon | $5,319 | $5,498 |
| Pennsylvania | $5,735 | $5,840 |
| Rhode Island | $6,042 | $6,177 |
| South Carolina | $5,765 | $5,938 |
| South Dakota | $5,131 | $5,235 |
| Tennessee | $5,579 | $5,688 |
| Texas | $6,596 | $6,753 |
| Utah | $5,456 | $5,600 |
| Vermont | $5,278 | $5,466 |
| Virginia | $6,822 | $6,969 |
| Washington | $5,998 | $6,156 |
| West Virginia | $5,074 | $5,144 |
| Wisconsin | $4,908 | $4,961 |
| Wyoming | $5,754 | $5,782 |
As expected, major cities like San Diego and San Francisco had higher vs. average credit card debt, but Napa had the highest debt among California cities.
Credit card debt in major cities
- San Francisco: $6,659
- San Diego: $6,825
- Oxnard: $6,588
- Napa: $7,240
- Vallejo-Fairfield: $6,584
Consumer Debt in California
In addition to credit card debt, California residents predictably also have significant amounts of student loan debt, home mortgage, and car loan debt.
Student Loan Debt in California
As college tuition continues to rise, young people are finding themselves trapped in hundreds of thousands of dollars in debt. In many cases students graduate with over $100,000 owed.
In 2019 the average student loan debt was $35,359. Students in California were right at the average mark at $35,238 – Washington D.C. had the highest average student debt at $52,684. [3]
Student Loan Debt by U.S. State
| State | 2018 | 2019 |
|---|---|---|
| Alabama | $33,742 | $35,674 |
| Alaska | $30,085 | $32,096 |
| Arizona | $32,705 | $34,740 |
| Arkansas | $30,345 | $32,203 |
| California | $35,238 | $37,468 |
| Colorado | $33,521 | $35,658 |
| Connecticut | $34,203 | $36,025 |
| Delaware | $34,000 | $36,098 |
| District of Columbia | $52,684 | $55,729 |
| Florida | $33,833 | $36,706 |
| Georgia | $37,644 | $40,692 |
| Hawaii | $33,084 | $35,009 |
| Idaho | $31,121 | $32,351 |
| Illinois | $34,821 | $36,975 |
| Indiana | $30,218 | $31,992 |
| Iowa | $27,886 | $29,416 |
| Kansas | $29,409 | $31,239 |
| Kentucky | $30,134 | $32,174 |
| Louisiana | $32,516 | $34,508 |
| Maine | $30,864 | $32,521 |
| Maryland | $38,496 | $40,630 |
| Massachusetts | $34,671 | $36,181 |
| Michigan | $33,243 | $35,307 |
| Minnesota | $30,395 | $32,052 |
| Mississippi | $32,431 | $35,478 |
| Missouri | $31,752 | $33,607 |
| Montana | $29,250 | $31,030 |
| Nebraska | $28,183 | $30,013 |
| Nevada | $31,629 | $33,863 |
| New Hampshire | $31,931 | $34,072 |
| New Jersey | $35,104 | $37,370 |
| New Mexico | $30,884 | $33,610 |
| New York | $36,032 | $37,753 |
| North Carolina | $33,959 | $36,257 |
| North Dakota | $27,779 | $29,267 |
| Ohio | $32,575 | $34,365 |
| Oklahoma | $29,884 | $31,673 |
| Oregon | $35,047 | $36,989 |
| Pennsylvania | $32,698 | $34,840 |
| Rhode Island | $31,739 | $33,373 |
| South Carolina | $34,515 | $36,552 |
| South Dakota | $27,082 | $28,782 |
| Tennessee | $32,788 | $35,016 |
| Texas | $30,677 | $32,441 |
| Utah | $30,244 | $31,671 |
| Vermont | $32,083 | $34,221 |
| Virginia | $34,930 | $36,885 |
| Washington | $31,978 | $34,193 |
| West Virginia | $29,931 | $31,222 |
| Wisconsin | $28,955 | $30,556 |
| Wyoming | $27,780 | $28,974 |
When compared to the rest of the country, California’s graduates tend to pay down their loans slower, but also more responsibly over the years. In general, California’s students are able to make their monthly payments and have fewer delinquencies.
Mortgage Debt in California
According to an Experian report in 2019, the average Californian owed $363,537 in mortgage debt, the 2nd highest in the country – the average mortgage debt in the U.S. was $202,284 . The highest mortgage debt goes to Washington D.C. residents which have, on average, $418,555 in debt. [4]
Mortgage Debt by U.S. State
| State | 2018 | 2019 |
|---|---|---|
| Alabama | $137,854 | $140,659 |
| Alaska | $221,505 | $223,430 |
| Arizona | $199,421 | $202,148 |
| Arkansas | $126,218 | $128,842 |
| California | $356,892 | $363,537 |
| Colorado | $250,003 | $258,026 |
| Connecticut | $225,792 | $225,386 |
| Delaware | $182,953 | $185,452 |
| Florida | $183,733 | $187,440 |
| Georgia | $170,848 | $174,275 |
| Hawaii | $337,060 | $344,819 |
| Idaho | $164,628 | $169,603 |
| Illinois | $176,001 | $177,150 |
| Indiana | $118,017 | $120,354 |
| Iowa | $128,447 | $131,709 |
| Kansas | $135,741 | $137,542 |
| Kentucky | $122,949 | $126,310 |
| Louisiana | $145,922 | $151,763 |
| Maine | $134,213 | $136,963 |
| Maryland | $250,713 | $252,583 |
| Massachusetts | $244,838 | $252,207 |
| Michigan | $130,558 | $132,523 |
| Minnesota | $171,919 | $175,085 |
| Mississippi | $119,078 | $121,608 |
| Missouri | $136,259 | $139,320 |
| Montana | $175,909 | $180,926 |
| Nebraska | $136,432 | $139,626 |
| Nevada | $219,989 | $225,095 |
| New Hampshire | $175,915 | $178,409 |
| New Jersey | $235,917 | $239,362 |
| New Mexico | $162,079 | $160,967 |
| New York | $230,791 | $236,093 |
| North Carolina | $159,133 | $162,366 |
| North Dakota | $159,748 | $162,702 |
| Ohio | $120,903 | $122,765 |
| Oklahoma | $131,702 | $134,244 |
| Oregon | $219,542 | $224,503 |
| Pennsylvania | $142,621 | $145,206 |
| Rhode Island | $181,006 | $185,646 |
| South Carolina | $155,673 | $159,359 |
| South Dakota | $148,732 | $150,913 |
| Tennessee | $151,692 | $155,844 |
| Texas | $170,521 | $176,736 |
| Utah | $207,090 | $213,771 |
| Vermont | $146,059 | $147,236 |
| Virginia | $239,954 | $242,794 |
| Washington | $254,833 | $262,641 |
| Washington, D.C. | $410,961 | $418,555 |
| West Virginia | $109,030 | $110,729 |
| Wisconsin | $137,574 | $138,935 |
| Wyoming | $183,456 | $184,625 |
The good news is that even though California is the highest, it also has one of the highest average home values. The data is also skewed because large cities such as Los Angeles and San Francisco have average home values well over $1,000,000. In a way the average for the entire state is a bit biased.
California Statute of Limitations
California actually has an advantageous statute of limitations for people and businesses that are unable to pay off their debt. For all unsecured debts (i.e. credit card debt), the California statute of limitations is 4 years (for most debt) – excludes those made with an oral contract.[5]
Oral statute of limitations in California is 2 years.