Californians Struggle with Bill Payments as Debt Levels Surge

February 27, 2025 TruthUSA

Recent data indicates that Californians have reached the highest levels of per capita debt since 2008, with an increasing number falling behind on their payments.

According to the latest Quarterly Report on Household Debt and Credit by the Federal Reserve Bank of New York, Californians are struggling with bills amidst the highest per capita debt levels recorded since 2008.

In the first quarter of 2024, the per capita household debt in California reached its peak at $86,940, before declining slightly in the fourth quarter to $86,130. In comparison, the average U.S. per capita debt was just $50,540 in the fourth quarter.

Moreover, an increasing number of Californians are missing payments on their debts. Data from the New York Fed shows that 3.25 percent of Californians were 30 days late on debt repayments in the fourth quarter, marking a nine-year high and the highest level since the first quarter of 2016. The national average for this figure was notably higher, at 4.14 percent.

Joel Kotkin, the executive director at Chapman University Center for Demographics and Policy, remarked that while households in other states also face financial challenges, California’s elevated debt levels may largely be attributed to its high cost of living.

“The financial pressures could be more intense due to elevated costs,” he told The Epoch Times.

With existing bad financial habits combined with a lackluster economy, he suggested that many Californians might choose to rent rather than purchase homes or incur more debt to buy property.

“Californians are likely to make fewer home purchases compared to the rest of the country, and if they do buy, their debts will be substantial,” Kotkin noted.

A report from Upgraded Points in December 2024 revealed that the California metropolitan area facing the most severe credit card delinquencies, defined as being 90 days or more overdue, is the Riverside-San Bernardino-Ontario region, which has a delinquency rate of 15.2 percent, ranking as the eighth worst in the nation. In contrast, the San Jose-Sunnyvale-Santa Clara area recorded the lowest delinquency rate in the country at 6.3 percent.

According to data from personal finance company WalletHub, California ranked 11th for overall credit card delinquency at 21.58 percent. Furthermore, a separate report by WalletHub published in July 2024 indicated that Chula Vista in San Diego County experienced the highest increase in credit card delinquencies in the nation, soaring nearly 85 percent in the first quarter of 2024.

Data from the Bureau of Labor Statistics also shows that California’s unemployment rate remained stable from July to December 2024, with a slight increase to 5.5 percent. However, the manufacturing sector experienced a 3.4 percent decline in employment during the same time frame.

California’s household debt crisis is not isolated. The New York Fed reported that nationwide household debt rose by $93 billion, totaling $18.04 trillion in the fourth quarter of 2024. Additionally, mortgage balances increased by $11 billion in the third quarter, reaching $12.61 trillion by the end of the fourth quarter.

Delinquencies on auto loans, credit cards, and home equity lines of credit also saw a slight uptick in 2024. Specifically, auto loans rose by $11 billion to total $1.66 trillion in the fourth quarter, while credit card balances grew by $45 billion, culminating in $1.21 trillion at the end of last year.

Source link