Colorado’s breathtaking landscapes are increasingly overshadowed by breathtaking bills. Despite a high-growth economy, many households face a concerning paradox. Expenses are rising, but wages have not kept pace. To fill the gap, many families now rely on high-interest credit cards.
Credit cards were once for extra purchases. Now, for some people, they are a vital safety net. Many people rely on revolving debt, which moves balances from one card to another, with lower rates month to month. In Colorado, 33% of debtors now cite everyday expenses – groceries, utilities and childcare – as the primary reason for their debt. Another 41% point to unexpected emergencies, such as medical bills or car repairs.
From 2024 to 2025, there was a 6.5% increase in Coloradan’s average debt. This increase has caused household savings to deplete faster than the national average.
I am a professor and the chair of the Department of Marketing at the University of Denver’s Daniels College of Business. My research investigates debt payment strategies and consumer welfare.
Colorado’s overall cost of living is 12% higher than the national average. While groceries and healthcare are generally on par with the rest of the country, the state’s overall affordability is impacted by housing and childcare.
Denver’s housing costs are 22% above the U.S. average, while mortgage debt accounts for a 77.4% of all household debt in the state. This takes up a large portion of a family’s monthly income.
And homeowners face soaring insurance premiums – including a 47% gain in 2025. And infant childcare now averages almost $21,000 a year.
Overall, inflation has cost the average family in Colorado US$60,233 in total extra spending since 2020. And those expenses are only going up. In 2025 alone, the average Colorado household spent $20,800 more on just the essentials – like shelter, utilities, insurance and groceries – than they did in 2019.
Yet from 2016 to 2023, spending grew about 30% faster than income. As costs rise and incomes stagnate, many families lack emergency savings. These households are left with no choice but to push variable expenses and essentials onto their credit cards.
Colorado ranks 12th in the nation for the highest average credit card debt with $7,267. The national average balance per borrower was approximately $6,735 in 2025.
A small percentage of individuals with large debt balances drive the average up. The median represents the exact middle point of the population. The median amount of credit card debt per person is $3,305 in Colorado, ranked fourth in the country. The average person in Colorado pays $266 toward their credit card bill each month. Thus, it would take the average Colorado borrower nearly 14 months and $421 in interest to pay off the debt balance.
In most realistic cases, however, borrowers are trapped in prolonged repayment cycles, where borrowers continually carry a revolving credit balance from month to month while making only partial or minimum payments.
The burden of credit card debt is not distributed equally. Generation X, ages 45–60, carries the heaviest burden in the state. Their average balances have reached $9,600. This group faces the “sandwich effect.” They must often support both adult children and aging parents. This is difficult due to Colorado’s high healthcare and living costs.
Millennials, ages 29–44, hold the second-highest average balances at $6,961. For them, credit cards often serve as a stopgap measure for massive housing costs and childcare as they navigate starting and supporting a family. Their average debt levels have surged 134% since 2012.
Generation Z, ages 18–28, carries lower average balances – around $3,493. However, they face the fastest rate of debt growth, with their balances surging nearly 7% year over year. These young adults entered the workforce during peak inflation. They rely on revolving credit much earlier in their careers than previous generations.
This debt crisis exposes deep income and demographic disparities, illustrating a “K-shaped” economic divide. Lower-income earners with annual household incomes under $50,000 are disproportionately affected by debt. Over 56% of middle-income households in the 40th to 59th income percentiles carry a balance. In contrast, only 25% of top earners do so, primarily using cards for rewards.
Women are also significantly more likely to carry a balance than men, 50% versus 43%. This stems from earnings gaps and managing household budgets in an inflationary environment.
Furthermore, communities of color face a persistent credit gap. More than 10% of Black households and 9% of Hispanic households in Colorado lack access to standard bank accounts and mainstream credit products. This pushes them toward even higher-interest alternative debt products, such as payday and pawn shop loans.
Overcoming credit card debt can feel impossible, especially with interest rates exceeding 21%.
For debt repayment, academic research and behavioral economics point to two popular strategies: the “debt avalanche” and the “debt snowball” methods.
The avalanche method focuses on mathematical efficiency – those with debt allocate every extra dollar to the balance with the highest interest rate while paying the minimums on the rest. This saves the most money over time.
Conversely, the snowball method leverages human psychology. By paying the smallest balance first, you achieve “quick wins” that build momentum.
For those who feel entirely overwhelmed by their financial situation, formal interventions are effective. Nonprofit credit counseling can help consumers evaluate their budgets and enroll in debt management plans. Under a plan, counseling agencies negotiate directly with creditors to lower interest rates and waive fees. This consolidates debt into one manageable monthly payment.
Studies evaluating the National Foundation for Credit Counseling’s Sharpen Your Financial Focus program show its effectiveness. Clients who receive financial counseling substantially reduce their revolving debt over time.
Finally, Coloradans do not have to navigate this crisis alone. Residents can contact their local Office of Financial Empowerment. These offices provide free financial coaching and consumer protections. They also offer access to safe banking products.
If you’re in debt, seeking outside assistance can help you break the cycle of revolving debt and build long-term financial stability.
Read more of our stories about Colorado.
This article is republished from The Conversation, a nonprofit, independent news organization bringing you facts and trustworthy analysis to help you make sense of our complex world. It was written by: Ali Besharat, University of Denver
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Ali Besharat does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
