From young professionals to near retirees, many Rhode Islanders are struggling with rising credit card debt, financial advisers say.
Some clients are delaying major life milestones – not because of luxury spending but because they’re racking up debt just to cover everyday essentials, according to Frederick “Rick” and Michelle Harkins, founding partners of Providence-based Harkins Wealth Management LLC.
“These aren’t all low-income clients,” Rick Harkins said. “Many of them have good incomes, but wages aren’t keeping up with expenses.”
“Housing, food, student loans – they’re all expensive,” Michelle Harkins said. “Many professionals don’t think they can even buy a home right now.”
The trend mirrors a nationwide surge. Credit card balances across the U.S. have risen to near-record levels this year, surpassing $1 trillion, according to the Federal Reserve Bank of New York. But Rhode Islanders are feeling the pressure more acutely.
The state ranks No. 13 in the country for average credit card debt, according to a LendingTree analysis released Nov. 6, and local households carry heavier balances than most nationwide. Credit card holders in Rhode Island carried an average balance of $7,651 in the first quarter of 2025, roughly 4.5% above the national average.
“It certainly is more pronounced here,” Michelle Harkins said. “We are seeing concerns from clients about how to handle it.”
Local costs and economic pressures are a major factor. Wage growth continues to lag the rising cost of essentials, according to the U.S. Bureau of Labor Statistics. The BLS Consumer Price Index report released Sept. 12 shows Northeast food prices up 3.1%, utility gas up 23% and electricity up 9.3% from August 2024 to August 2025.
Housing remains the most destabilizing force: last year, the median home price in Rhode Island exceeded $537,000 against a statewide median income of just $80,791– a more than 100% surge since 2014 that has pushed thousands to the financial brink, Realtor.com data shows.
“That gap is insurmountable for many households, even dual-income ones,” said Asli Ascioglu, Bryant University finance professor.
As a result, many people are turning to credit cards and their sky-high interest rates just to make ends meet, money advisers said.
Susan Gardiner, a financial adviser at South Coast Wealth Management LLC in North Kingstown, said the way people use credit cards can make a difference.
“My clients use credit cards for everything from groceries to home renovations,” she said. “Sometimes these purchases take longer to pay off than people realize, however big or small.”
Despite rising costs, many households continue to shop at higher-end stores. Ascioglu said the Whole Foods parking lots in Providence are consistently full.
“People are definitely spending,” she said.
Part of the surge in debt also comes from financial plans that were paused during the COVID-19 pandemic that are now coming due.
“Plans that were frozen during the pandemic are no longer on hold,” Michelle Harkins said. “Families are moving forward with home purchases, weddings and starting families. Meanwhile, expenses have grown faster than wages.”
As immediate pressures mount, Ascioglu warned of long-term consequences of having a large balance on the monthly bill.
“Carrying credit card debt is a future disruptor,” she said. “It interferes with life’s plans and financial futures. If people begin defaulting on credit cards or filing for bankruptcy, it’s going to catch up with them.”
She warned that once a household defaults, it likely cannot get another credit card, which she called “very dangerous.”
Some households are attempting to manage rising balances through balance transfers or home equity lines of credit, which many financial experts advise to escape paying higher interest rates. But Gardiner said these strategies are not free of consequences.
“People tell themselves, ‘I’ll just take a card with 0% for 12 to 18 months,’ but many struggle to keep up with monthly payments,” she said. “Once that period ends, rates as high as 29% kick in, and interest charges can balloon quickly. [In those cases], the 0% offer isn’t really a benefit to the user. It primarily benefits the credit card company.”
Credit card delinquencies among lower-income households could rise sharply in the coming months, Ascioglu said, citing the combined pressures of slow wage growth and rising living costs.
“These households can’t keep shuffling debt indefinitely,” she said. “It’s similar to mortgage origination trends before 2008. Eventually, defaults will happen, and that can hit both families and the financial system.”
Even without high interest, everyday spending can compound debt just by using one’s credit card, according to Gardiner.
“Some places, like day cares, charge a convenience fee if you pay with a credit card,” Gardiner said. “You may make your payments on time, but the extra fees and interest make balances grow faster than expected.”
As debt grows, managing it becomes as much about personal priorities as interest rates.
“It’s not about age or income,” Gardiner said. “We talk about spending habits, lifestyle choices and what’s truly important. Some want to start a family or get married soon – we help them make those decisions without piling on more debt.”
