With prices rising on everything from groceries to rent amid a backdrop of economic uncertainty, many Americans are struggling to pay the bills.
They’re even turning to credit to pay for essentials. A recent LendingTree survey found that one-quarter (25%) of buy-now-pay-later users have used these loans to buy groceries.
But some states are struggling more than others. Florida is now one of the most financially stressed states in the country, second only to another Southern state, according to a new report by WalletHub, which defines financial distress as having credit in forbearance or deferring payments due to financial difficulty.
“When you combine data about people delaying payments with other metrics like bankruptcy filings and credit score changes, it paints a good picture of the overall economic trends of a state,” WalletHub analyst Chip Lupo said about the findings.
Here are the five states struggling the most and why people there are having such a tough time.
Texas is the most financially distressed state in the country, followed by Florida, Louisiana, Nevada and South Carolina. The states that are best off? That honor goes to Hawaii, followed by Vermont, Alaska, Oregon and New Mexico.
To determine their ranking, WalletHub compared all 50 states across nine key metrics in six categories, calculating an overall score by weighting the average across all metrics. For example, the ‘credit score’ category is determined by two key metrics: the average credit score as of March earned double weight, while the change in credit score from March 2024 to March 2025 earned full weight.
Once all the numbers were crunched, Texas came out on top — and, in this case, No. 1 means the most distressed or worst off — even though the state has a larger GDP than most countries (ranking ninth on the world stage). And it still has one of the top 10 economies in the U.S.
Texans search Google for ‘debt’ and ‘loans’ at a high rate, “which shows that many people are desperate to borrow, despite already owing money,” says the WalletHub report. They also ranked sixth in the change in number of bankruptcy filings from March 2024 to March 2025, with non-business bankruptcy filings increasing more than 22% in the past year.
Overall, Florida was the second-most financially distressed state in the country, ranking No. 1 in the share of people with accounts in financial distress and No. 2 in the average number of accounts per person that were in distress. Florida had the ninth-worst credit score ranking in the country; one previous WalletHub study found that Floridians have the second-highest credit delinquency rate nationally.
Following in third place was Louisiana, which ranked above Florida for the average number of accounts in distress — taking the No. 1 spot — and above Texas in the ‘loans’ search index ranking (at No. 2). “Around 11.8% of Louisianians also have a credit account in forbearance or with deferred payments, the highest share in the country,” according to WalletHub.
Nevada, coming in at No. 4 overall, had the third-worst credit score ranking in the country (the top spot went to Montana), while South Carolina, at No. 5 overall, ranked highly in the number of people with accounts in financial distress and average number of accounts in distress.
As for the least financially distressed states? Hawaii was the winner here, even though the state had the fourth-worst credit score ranking. But it performed well in all other categories and, unlike Texas, it was the state with the fewest number of people searching Google for ‘debt’ and ‘loans.’
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While states like Texas and Florida may be struggling the most, all states are struggling to some degree. Of the five states that were deemed to be the least financially distressed in the WalletHub study, three of them (Hawaii, Vermont and New Mexico) didn’t fare well on their credit score ranking.
Indeed, the bottom 60% of U.S. households (by income) fall short of the threshold for a minimal quality of life, according to a Ludwig Institute for Shared Economic Prosperity (LISEP) analysis. (The analysis takes into account essentials, like food and shelter, as well as basic leisure costs, such as streaming subscriptions.)
It points to the fact that wages haven’t kept up with rising costs — for example, medical premiums skyrocketed 301% from 2001 to 2023 and rent jumped by 131%.
If you’re struggling to make ends meet, start by making a budget so you’ll have a clear idea of how you’re spending your money (and where you can cut back).
If you’re behind on paying your bills, be proactive. “Do it before a debt collector gets involved. Tell your creditors what’s going on, and try to work out a new payment plan with lower payments you can manage,” according to the Federal Trade Commission consumer advice.
The same goes for mortgage payments. If you’re struggling, contact your lender before they foreclose on your home. If you’re acting in good faith, your lender may temporarily lower or defer your payments or work with you to extend your repayment period (meaning lower overall payments).
When it comes to credit card debt, you’ll want to make at least the minimum payments each month so your credit score doesn’t take a hit. But since interest rates are so high — averaging around 24% these days — you’ll want to focus on paying this down as soon as possible, along with any other high-interest debts. You can do this through debt-reducing strategies such as the snowball or avalanche methods.
You may also want to seek out additional sources of income, whether that’s taking on a side gig, upskilling or reskilling for a higher-paying role or new job, or looking for passive income such as renting out a room in your home.
Digging yourself out of debt isn’t easy, but there are resources that can help, including low-fee credit counseling services. For housing challenges, you can contact a free, HUD-certified counselor for advice via your local U.S. Department of Housing and Urban Development office.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
