With the economy still on shaky ground as a new Covid variant emerges during the holiday shopping season, the personal-finance website WalletHub released its report on 2022’s Cities with the Most & Least-Sustainable Credit Card Debt
|Most-Sustainable Credit Card Debt||Least-Sustainable Credit Card Debt|
|Fremont, CA||Miami, FL|
|San Francisco, CA||Hialeah, FL|
|Irvine, CA||Knoxville, TN|
|Jersey City, NJ||Gulfport, MS|
|San Jose, CA||Missoula, MT|
|Madison, WI||Dallas, TX|
|Columbia, MD||San Antonio, TX|
|New Haven, CT||El Paso, TX|
|Seattle, WA||Tucson, AZ|
|Philadelphia, PA||Reno, NV|
For the full rankings, please visit here
Credit Card Debt Study Key Stats
- Q3 Increase. U.S. consumers racked up $23.6 billion in credit card debt during Q3 2021.
- Bigger-Than-Usual Increase. The increase in credit card debt during Q3 2021 was 46% bigger than the post-Great Recession average for the third quarter.
- Huge Reversal From Last Year. Credit card debt fell by $82 billion during 2020, and WalletHub now projects an increase of $70 billion in 2021.
- Lower Charge-Off. The 1.67% credit card charge-off rate for Q3 2021 is 34.3% lower than last quarter and 50% lower compared to last year.
- Most and Least Sustainable. The city with the most sustainable debt is Fremont, California while the city with the least sustainable debt is Miami.
- Ease Your Debt. The best balance transfer credit cards currently offer 0% APRs for the first 18-21 months with no annual fee and balance transfer fees as low as 3%.
What do the latest credit card debt statistics tell us about the health of U.S. consumers?
“The latest credit card debt statistics indicate that the high cost of daily life is unaffordable for many consumers, which forces them to rack up more and more debt. Household budgets are under a lot of pressure,” said Jill Gonzalez, WalletHub analyst. “Statistics for Q3 2021 in particular tell us that consumers have returned to pre-pandemic behaviors in terms of spending beyond their means. After adding $23.6 billion in new credit card debt to our books during Q3 2021, consumers now owe more than $951 billion to credit card companies overall. At $8,006, the average household balance is not too far off from becoming unsustainable.”
Why are debt levels increasing faster now than last year?
“Debt levels are rising faster than last year because many Covid precautions and government stimulus programs have ended. People are out spending money more, and they are getting less support from the government,” Gonzalez added.
How will credit card debt levels look after Q4 data comes in? Which cities are doing the best and the worst when it comes to credit card debt?
“The cities with the most sustainable credit card debt levels are Fremont, San Francisco, and Irvine. These cities are all affluent areas of California – one of the richest states in the country,” Gonzalez said. “The cities with the least sustainable credit card debt are Miami, Hialeah, Florida, and Knoxville, Tennessee. These areas are characterized by high amounts of debt relative to local income levels.”