According to recent data from WalletHub highlights, Texas has the second-highest state in the nation for credit card debt, with Texans collectively owing around $111.3 billion. Over the course of just one year, from 2022 to 2023, the average household credit card debt in Texas surged by a substantial $3.94 billion, averaging $9,216 per household.

A significant factor contributing to this increase in debt is inflation, as noted in a study by Upgraded Points. Texas ranks 12th among states where inflation prompts individuals to rely more on credit cards. Consequently, approximately 22% of adults in Texas are resorting to their credit cards more frequently due to the rising cost of living, while 36.7% are turning to credit cards to cover essential expenses.

These numbers highlight the financial struggles many Texans face, stressing the need for better financial education and support. Addressing the root causes of increasing debt is crucial for protecting households’ financial stability. So, why are so many people in Texas facing challenges with credit card bills and loans today? 

Here are some key reasons for ongoing debt;

1.High Cost of Living

Living costs in cities like Houston and Austin, Texas, are high, particularly for housing and healthcare. Texans often turn to credit cards or loans to cover these expenses. However, this reliance on credit can lead to long-term debt, especially if balances can’t be paid off in full each month. As a result, many residents in Texas face ongoing financial challenges due to the expensive living conditions in these cities.

1.High Cost of Living

Living costs in cities like Houston and Austin, Texas, are high, particularly for housing and healthcare. Texans often turn to credit cards or loans to cover these expenses. However, this reliance on credit can lead to long-term debt, especially if balances can’t be paid off in full each month. As a result, many residents in Texas face ongoing financial challenges due to the expensive living conditions in these cities.

2.Poor Financial Literacy

Not knowing enough about money often leads to big debts that are hard to handle. People may spend too much or use credit cards in ways that make money problems worse. This lack of understanding about money makes it tough to stay financially stable. Some people overspend to keep up with trends or their lifestyle, adding to their debt. Giving simple money tips can help people make better choices and avoid debts they can’t handle.

3. Employment Uncertainties

Job insecurity means not having a stable job or income. When this happens, you may struggle to pay for things you need like rent or groceries. You might use credit cards or loans to get by. But relying on these can lead to more debt because of high fees. Finding a steady job or other ways to make money is important to avoid getting stuck in a cycle of borrowing and debt problems.

4. Healthcare Bills

Even with insurance, medical bills can be a big financial burden because they’re often very expensive. Even if you have coverage, you might still have to pay a lot of money out of your own pocket for things like deductibles and copays. These costs can add up fast, especially if you need special treatments or long-term care. Plus, there are other expenses like getting to appointments or buying medicine that can make it even harder to manage. This can leave you with big debts that are tough to handle, even if you have insurance.

5. Quick Credit Access

Getting credit cards and loans in Texas is easy, which can make people borrow more than they can afford to pay back. With simple processes and few requirements, it’s tempting to overspend, especially with high-interest rates. This leads to financial problems in the long run. Some people also get stuck in high-interest loans, like payday loans, which are hard to pay off. It’s important to be careful with borrowing and plan your finances wisely to avoid getting into debt you can’t handle.