Americans in these 3 states are drowning in debt. Here’s how to keep your head above water

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Many Americans are under financial strain as they grapple with rising costs and carry growing balances on mortgages, credit cards and personal loans. Now, a new LendingTree study found that consumer debt is rising especially quickly in three states.

U.S. consumers increased their average total debt from $134,495 to $139,659 between Q3 2024 and Q3 2025 — an increase of 3.7%, or $5,164, according to the study.

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Maryland experienced the largest increase, with an average total debt rising 10.3% from $170,251 to $187,750. Nevada followed, with an increase of nearly 10% and an average consumer debt of $163,999, and Idaho ranked third, with $161,941 in average consumer debt and a 9.3% increase.

Although these states saw the sharpest increases, consumer debt levels are rising nationwide. Missouri was the only state to record a decline, with average debt falling 0.3%. Meanwhile, average mortgage balances increased in 45 states, personal loan and credit card debts rose in 39 states, and average non-mortgage debt increased in 28 states.

Why debts are rising

“Given stubborn inflation, still-high interest rates and a tough job market, I tend to believe that most of the debt growth we’re seeing today is because of people struggling, but there’s never just one reason,” Matt Schulz, LendingTree chief consumer finance analyst, told LendingTree (1).

That complexity is evident in Idaho’s case: The state ranked among those with the largest increases in consumer debt, yet also recorded the fastest average real wage growth (6.7%) among U.S. states between July 2024 and June 2025, according to Visual Capitalist’s analysis of Bureau of Labor Statistics data (2).

For many, though, rising debt levels come from feeling increasingly squeezed. While inflation rates have come down from their highs in 2022, prices continue to rise — up 3.3% year over year ending in March (3).

Meanwhile, housing prices remain near historic highs (4). And mortgage rates, while below recent peaks, are still well above levels seen between the Great Recession and the early years of the pandemic (5). Both factors can lead to higher mortgage debt.

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More than one-third (38%) of consumers surveyed in September 2025 by Achieve, a debt management company, say it’s “difficult” or “very difficult” to pay all of their bills on time, with two-thirds (67%) saying they don’t earn enough income to cover their spending.

The most commonly cited reasons for missed debt payments were a job loss or reduced income (21%) and higher costs of essential expenses (15%) (6). If prices continue to rise or the labor market weakens, more people could find themselves stretched thin.

Read More: Robert Kiyosaki warned of a 'Greater Depression' — with millions of Americans going poor. Was he right?

How to rescue yourself from debt

With strong economic pressures across the U.S., it’s possible for almost anyone to find themselves drowning in debt. Some signs you may be getting in over your head include not knowing how much you owe, only being able to make minimum payments, or borrowing money to pay everyday bills, according to Debt.com (7).

Another red flag is having a debt-to-income (DTI) ratio above 40%. To figure this out, add up your total monthly debt payments (including your rent or mortgage) and divide that by your gross monthly income (8).

If you’re losing sleep over your finances or hiding your situation from family and friends, it may be time to make a change.

Pay down your debt

Begin by taking stock of what you owe. Create a list showing each lender, the balance owed and the interest rate, minimum monthly payment and due date. Prioritize bringing any delinquent accounts back into good standing, if possible.

Once you have a better understanding of your debt situation, consider which debt repayment strategy works best for you.

The two most common strategies are the avalanche method and the snowball method. The first focuses on paying off your biggest, or highest-interest, debt first, then knocking off the other ones in short order. Meanwhile, the snowball method takes the opposite approach — building up steam by paying off the little debts first on the way up to the big one.

Another option is consolidating all your debts into a personal loan through Credible could be an effective way to get rid of your debt faster. Instead of juggling multiple monthly payments, you’ll have one predictable payment to manage each month.

Through Credible's online marketplace, finding the right loan becomes much simpler. Credible lets you comparison-shop for the lowest interest rates with just a few clicks.

In less than three minutes, you can see all the lenders willing to help pay off your credit cards or other debts with a single personal loan.

If you owe a substantial amount, you may also want to see if you qualify for a debt relief program to help clear a significant portion of your debt.

With Freedom Debt Relief, you can speak with a certified debt relief consultant for free, who can show you how much you can save by partnering with them.

If you’re eligible, they can negotiate settlements with your creditors until all of your enrolled debt is resolved. Whatever you choose, the first step to rebuilding your financial footing is clearing as much debt as you can.

Find the money you need to pay down your debt

To find the money needed to repay debt, you could start by creating a budget that works for you. Freeing up money from your monthly line items is one way to find the cash you need to stay on top of, and pay down, your interest plus principal.

You can create a custom budget to track where your money is going at all times with Monarch Money.

Monarch Money puts all your finances under one roof, from your banking statements to your investments. Once you link your accounts — including investments and real estate — you will be able to view every transaction through one clean, searchable list.

You can get custom notifications regarding upcoming bills, allowing you to stay on top of your bills and reducing your chances of missing a payment or incurring late fees.

Monarch Money also helps you forecast your spending beyond just one month, as well as save for big goals along the way.

You can get a seven-day free trial to see if it’s right for you. And if you like the platform, you can get 50% off for your first year with the code WISE50.

Create an emergency fund

Getting out of debt is a major win — but staying out of it takes a plan. That’s where an emergency fund comes in. Stashing away three to six months’ worth of expenses can give you breathing room when life throws a curveball, so you’re not forced to lean on high-interest credit cards.

A high-yield account like a Wealthfront Cash Account can be a great place to grow your uninvested cash, offering both competitive interest rates and easy access to your money when you need it.

A Wealthfront Cash Account currently offers a base APY of 3.30% through program banks, and new clients can get an extra 0.75% boost during their first three months on up to $150,000 for a total variable APY of 4.05%.

That’s ten times the national deposit savings rate, according to the FDIC’s March report.

Additionally, Wealthfront is offering new clients who enable direct deposit ($1,000/mo minimum) to their Cash Account and open and fund a new investment account an additional 0.25% APY increase with no expiration date or balance limit, meaning your APY could be as high as 4.30%.

With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, your funds remain accessible at all times. Plus, you get access to up to $8M FDIC Insurance eligibility through program banks.

Build better financial habits

With that safety net in place, the focus can shift to growing your money over time. You don’t need thousands of dollars upfront to get started — even small contributions can snowball.

For instance, investing $20 each week for 30 years can help you save over $179,000, assuming it compounds at 10% annually.

If those kinds of returns are too tempting to pass up, platforms like Acorns allow you to turn your spare change from everyday purchases into an investment opportunity.

Signing up for Acorns takes just minutes: All you have to do is link your cards, and Acorns will round up each purchase to the nearest dollar, investing the difference — your spare change — into a diversified portfolio managed by experts at leading investment firms like Vanguard and BlackRock.

With Acorns, you can invest in an index ETF with as little as $5 — and, if you sign up today and set up a recurring investment, Acorns will add a $20 bonus to help you begin your investment journey.

— With files fromVawn Himmelsbach

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Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

LendingTree (1); Visual Capitalist (2); U.S. Bureau of Labor Statistics (3); Federal Reserve Bank of St. Louis (4); Federal Reserve Bank of St. Louis (5); Achieve (6); Debt.com (7); Better Money Habits (8)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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