HONOLULU (KHON2) — In Hawaiʻi, we’re known for our beautiful beaches, gorgeous hikes, sense of community, dedication to the spirit of aloha and active volcanoes; but we’re also becoming a key player in the national debt conversation.
In the final quarter of 2024, Hawaiʻi experienced one of the biggest increases in consumer debt across the United States. We ranked #3 out of the entire United States for debt increase.
This increase ensured that we came in third after Vermont and New Hampshire for the most rising debt.
KHON2.com decided to dive into the numbers to see how things changed. Between the third quarter (Q3) and fourth quarter (Q4) of 2024, credit card debt in Hawaiʻi rose by 2.7% which brought the average credit card balance to $7,841.
While this is a noticeable increase, it’s not the biggest surge compared to other states. Still, it’s interesting that Hawaiʻi’s rise in credit card debt was somewhat moderate compared to other states with larger jumps.
What really stands out for Hawaiʻi is its auto loans. In Q4, the average auto loan balance in Hawaiʻi jumped by 2.2%, reaching $27,088.
This was the largest increase in auto loans amongst the top states; and this shows that people in Hawaiʻi are borrowing more for cars.
Personal loans also saw an increase in Hawaiʻi, rising by 1.5% to $15,011. While this wasn’t the largest rise, it was still amongst the top increases. Personal loans can be used for various things from consolidating debt to paying for education or home improvements.
Why the increase in debt?
Hawaiʻi, like many places, faces a unique economic landscape. With high costs for housing, groceries, gasoline and travel, the report indicates that many residents are finding themselves using credit cards or taking out loans to cover everyday expenses.
Hawaiʻi’s economy is also heavily dependent on tourism, which can fluctuate. This uncertainty could lead to people relying on credit and loans more than they would in more stable economic conditions.
What can Hawaiʻi do about it?
While Hawaiʻi’s debt increase isn’t as alarming as Vermont’s massive jump, it’s still worth paying attention to. Managing debt is key to maintaining financial health. Here are some tips that can help residents:
- Paying off debt: If you’re finding yourself using credit cards often, then create a repayment plan can help. Try to focus on high-interest debt first. It’s like using the “avalanche method” to tackle the tallest mountain first!
- Cutting costs: Review your spending. Are there things you can live without? Maybe you can cut back on dining out or online shopping to save money to pay off that credit card faster.
- Negotiating lower interest rates: Sometimes, talking to your creditor can help you lower your rates or set up a payment plan that works for you.
Looking ahead
Hawaiʻi, along with states like Vermont and New Hampshire, is facing some serious changes when it comes to debt. Whether it’s from credit cards, auto loans or personal loans, residents are borrowing more.
While this might reflect larger national trends, it’s important for Hawaiʻi to stay ahead of these rising debts to ensure a bright, financially stable future for its residents.
You can click here to read the full report.
In the end, while Hawaiʻi is famous for natural beauty and rich culture, it’s also becoming known for the rising debts of its people.