Californians have added more to their credit card balances than any other state residents in the union. That’s according to WalletHub’s “State’s With the Largest and Smallest Credit Card Debt Increases” report.
The latest available data says the average Golden State household has $13,416 in credit card debt. Californians collectively hold a $162,940,165,790 balance, an increase of $4,547,427,625 from the beginning of the year.
And with an ever-increasing cost of living, finding ways to decrease debt has become more and more difficult.
“Rising rent and housing prices are crippling California residents who are already struggling to meet their credit card payments,” says Gary Herman, President of Consolidated Credit. He continues, “And with the high unemployment rate in the state, it is becoming even more difficult for people to decrease or even maintain their level of debt.”
Consolidated Credit Helps California Residents Reduce Their Total Credit Card Payments by Up to 50%
However, the state has added more than 107,000 jobs in the first six months of 2024. That’s twice as many new jobs compared to the same time period last year, says California’s governor Gavin Newsom.
Banking and taxes in California
California’s income tax rates range between 1-13.3% and a state sales tax of 7.25%. California also allows local governments to collect a local sales tax of up to 3.5%. Therefore, when combined with the state sales tax, California’s highest sales tax rate is 10.75% in cities like Hayward, San Leandro, Alameda, Union City, and Neward. The average sales tax runs to about 8.492%.
The average Californian is more likely to bank than the average American. Currently, 7% of residents lack a checking or savings account.
California Housing Market
California’s per capita (average per person) income is $81,255, significantly higher than the national average of $69,815. The median household income is $89,870. In addition, the minimum wage in California is $16 per hour, compared to the federal minimum wage of $7.25.
While the extremes of California’s housing crisis have been concentrated in the Bay Area and Los Angeles, the challenges are statewide. Cities like Sacramento and Fresno have been experiencing yearly increases in average rental prices.
Take, for example, the median price of an existing single-family house is roughly $904,000.
California offers a homestead exemption, ranging from $349,720 to $699,426.
California has adopted ancient Greek polymath Archimedes’s exclamative point, “Eureka!” as its motto. Arguably, that exclamation comes after the realization that the average Californian must move to live comfortably after retiring. The average Californian has about $452,135 saved for their retirement when in reality, one needs to have around $1.5 million saved up to retire comfortably in the state. About 22% of retirees rely on Social Security for about 90% of their income.
Average California insurance premiums
Californians pay $2,810 per year for full coverage auto insurance – and $668 for minimum coverage.
California is technically not a no-fault state, and driving can be very expensive. However, drivers in California still retain the right to sue for any additional damages.
On the one hand, homeowner’s insurance rates are somewhat more affordable at a rate of $1,250 annually. On the other hand, the average health insurance premium comes up to $8,038, which is higher than the national average.
Helpful resources for Californians facing hardship
Food Insecurity
Region: Los Angeles & Long Beach Food Bank: Los Angeles Regional Food Bank Address: 1734 E. 41st Street, Los Angeles, CA 90058 Phone Number: 323 234-3030
Region: San Francisco Food Bank:SF-Marin Food Bank Address: 900 Pennsylvania Avenue, San Francisco, CA 94107 Phone Number: 415-282-1900
Region: Bakersfield Food Bank:Central California Food Bank Address: 4010 E. Amendola Ave., Fresno, CA 93725 Phone Number: 559 237-3663
Veterans
The latest available data shows California is home to 1,574,531 Veterans. These resources are available to help Veterans who are facing unemployment, homelessness, and other hardships.
How Consolidated Credit helps California residents find debt relief
In 2024, Consolidated Credit provided free credit counseling to 18,004 California residents. Of those, 4,415 went on to consolidate their debt with our help through a debt management program (the average amount of debt enrolled was $14,090). The others received a free debt analysis and complementary budget evaluation, and they were directed to the right solution for their situation to get out of debt as quickly as possible.
We’d also like to congratulate the 1,563 California residents who got debt-free last year with the help of Consolidated Credit!
Relief options to consider if you’re in debt in California
If you have good credit and need to pay off credit card debt and other non-secured debts, a debt consolidation loan is an excellent option for you. By having good credit, you’ll get a low-interest rate for a loan that refinances all of your debt with one monthly payment. This will help you get out of debt faster, and you may wind up paying less each month. This is an excellent solution for California State residents with high debt and a good credit score.
Californian homeowners may qualify for a home equity loan or a home equity loan of credit, also called a (HELOC). These types of loans use the equity in your home. Due to rapid home value increases, many residents have equity in their homes. The loan allows you to borrow against the equity in your home and pay off credit cards and other debt. This is not a step to take lightly because you could lose your home in foreclosure if you can’t make the payments. If you are considering borrowing against your home, call 1-800-435-2261 to speak with a HUD-certified housing counselor to make sure this is a safe option for you.
Consolidated Credit helps California residents with counseling programs that identify the best way to get out of debt after considering their situations. California residents can get a confidential debt and budget evaluation from a certified credit counselor. Afterward, the counselor will go over the available options and which course of action best meets a person’s needs and goals.
In California, as in other states, it’s best to avoid bankruptcy. If you can afford to repay all that you owe to avoid credit damage but can’t do it on your own, a debt management program can help. You enroll through a credit counseling agency. The agency will work with your creditors to reduce or eliminate interest and work out an affordable repayment schedule. Qualifying Californians can get out of debt in 36-60 payments, on average.
Another option for California residents is debt settlement. With debt settlement, you settle your debt independently or with the help of a debt settlement company. In this program, you agree to pay your creditors a portion of what is owed. This will damage your credit rating because you are not paying on the terms you first agreed to. Missed payments, which are often caused by this type of program, will hurt your credit rating for seven years. Even with those negatives, this can be an excellent program for California residents with overwhelming debt. It can help you avoid bankruptcy.
If you’re curious how we can help you, below are a few case studies from clients we’ve helped in California. If you’re facing challenges with debt, call us at (844) 276-1544 to receive a free debt and budget evaluation from a certified credit counselor.
Don’t let high interest rate credit card debt hold you back! Talk to a certified credit counselor to understand your options for debt relief
“I consolidated my credit cards so fast and efficiently with this program. Consolidated Credit made it all so easy!
”
Where
she
started:
Total unsecured debt: $17,196.00
Estimated interest charges: $9,052.90
Time to payoff: 10 years, 4 months
Total monthly payments: $687.84
After DMP enrollment:
Average negotiated interest rate: 8.56%
Total interest charges: $2,557.55
Time to payoff: 3 years, 8 months
Total monthly payment: $451.00
Time Saved
6 years, 8 months
Monthly Savings
$236.84
Interest Saved
$6.495.35
Case Study
Eric
from
Whitier, CA
“I’m very satisfied with the service. The payments are always made on time and the APR reduced significantly!
”
Where
he
started:
Total unsecured debt: $10,525.00
Estimated interest charges: $6,188.51
Time to payoff: 13 years, 8 months
Total monthly payments: $421.00
After DMP enrollment:
Average negotiated interest rate: 2.00%
Total interest charges: $542.18
Time to payoff: 5 years
Total monthly payment: $185.00
Time Saved
8 years, 8 months
Monthly Savings
$236.00
Interest Saved
$5,646.33
Case Study
Maria
from
San Mateo, CA
“I’m very happy with these services – it’s quick and easy to setup. The counselors are very professional and make it comfortable to transition into this program.
”
This content is based on accredited financial data gathered from reputable sources, such as government websites, credit bureaus, and nonprofit organizations. All articles are written by certified credit counselors and fact checked by certified financial experts.
Our team strives to provide educational content that fully informs readers of all their options as they relate to debt, credit and personal finance. Our goal is to give readers the information they need to make informed financial decisions on their own.
This article contains references that provide sources for the financial data we used. The numbers in brackets [1,2,3] are clickable links to each data source or study referenced.
