Alabama Among States With Worst Debt Problem

BIRMINGHAM, AL — Household debt in the U.S. is the highest it has ever been. In the first quarter of 2019, total household debt reached $13.67 trillion, nearly $1 trillion above its previous peak in 2008. Furthermore, the U.S. economy is more than ten years into its longest-ever expansion, and total household debt has increased for 19 consecutive quarters.

This is especially true for people in Alabama.

The report, published by financial services company Fabric, ranked Alabama 8th among the states with the worst debt problems. The study looked at auto, credit card, mortgage and student loan delinquencies, as well as poverty rate and average credit scores to determine its findings.

Here is how Alabama scored:

• Overall delinquency index: 69.2
• Auto loan delinquency: 6.2%
• Credit card delinquency: 7.7%
• Mortgage delinquency: 1.0%
• Student loan delinquency: 15.2%
• Average credit score: 654
• Poverty rate: 15.0%
• Household debt per capita: $36,780

"The key to managing debt is planning . . . Before you take on debt, you need to know three things: why you plan to take on the debt, how you are going to repay it and the date by which you will repay it," said Rod Griffin, Director of Consumer Education and Awareness at Experian.

The data also shows that young households are especially prone to missing payments. According to Griffin, "There are many reasons people miss loan payments. Often, it’s as simple as forgetting to send the payment. Automated payments systems can be a great tool."