4/11/2011 10:56 AM ET|
Top 25 cities for credit card debt
Debt is down overall, but cities in Texas, Georgia, Florida struggle with high balances.
If you live in San Antonio, you may want to go easy on those credit cards for a while. Same thing for many other Texans and lots of people living in Florida or Georgia.
Residents of those areas dominate a newly released list of the 25 U.S. cities that had the most credit card debt at the end of last year. Many people may have overdone it during the holidays and are still dealing with the aftermath, according to the study by Experian, a financial and information services company best known by consumers as one of the three major credit bureaus in the U.S.
"The message is that you need to be aware of the balance that you're carrying, and you need to make sure that you can carry it with some comfort," said Rod Griffin, Experian's director of public education. "Any kind of financial hiccup could be the proverbial straw that breaks the camel's back."
According to the survey, the average U.S. credit card holder owed more than $4,200 at the end of December. Fortunately, that's a decline of about 4 percent compared with the end of December 2009 and 8 percent compared with December 2007.
"It appears that consumers are reducing their credit card debt, and that's a very positive thing because it shows that they are managing to pay their bills," Griffin said.
Fewer cards in the wallet
At the same time, the average number of bank-issued credit cards has declined to 1.97 cards per customer, a drop of 23 percent since 2007. That's a mixed blessing, however. Here's why: With fewer cards in their wallets, Americans are tapping more of each card's available balance. The result is that consumers are using more than 30 percent of their total available bank card balance -- a jump of nearly 10 percentage points since 2007.
"We want consumers to understand that overspending at the holidays or at any other time of year can often have broader implications to their overall fiscal fitness," said Maxine Sweet, the vice president of public education at Experian. "By carrying over credit card balances and utilizing a significant portion of their available balance, they can potentially negatively affect their credit scores, which can in turn, hurt them when it comes to applying for other types of credit down the line, including mortgages and car loans."
The Alamo city's cry: 'Charge!'
Leading the way in this unenviable category are residents of San Antonio. The average bank card balance there at the end of last year was $5,177 -- 23 percent higher than the national average.
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At first blush, that would seem to be pretty bad news for the people who live there, suggesting some degree of economic stress, but maybe not.
"I don't know whether that's good news or bad news," said Denise Surratt, the director of counseling and education for Consumer Credit Counseling Service of Greater San Antonio. "I'm not seeing them come through the door (in greater numbers), so they must be able to handle the credit card debt."
She said the military has a large presence in the area and, partially as a result, employment and the rest of the economy tend to be relatively stable.
"This survey isn't saying that they're not paying their bills, only that they have taken out a good bit of credit," Surratt said. "That could be telling us that they're not too worried about layoffs and they feel more comfortable about using credit."
Griffin agreed that the survey did not touch on the subject of debt delinquency, and he said that Surratt's theory may carry some weight.
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Blaming one political party or the other is lame, lame, lame. This is simple, people - don't charge anything you don't have the money in the bank to pay for. If you don't, then SAVE FOR IT. Or do without it. Sadly, not everyone was raised this way. My parents grew up dirt poor during the depression, and earned their way to success. My dad went to college - it took him 12 years because he worked during the day and went to night school. And today, people can't seem to go without a big-screen TV on a desk clerk's income. With 3 or 4 kids.
Living below your means leads to a pretty easy, worry-free life. :)
I have to disagree about using credit cards. I always carry a balance of $2,000 to $3,000, but I PAY IT OFF EVERY MONTH. So I get to use their money for free for 30 days. I have not paid interest, annual fees, or any other kind of fee for over 20 years. Other benefits to me:
1. Rewards program on one card gives me about $350 cash every year
2. Other card gives me 5% add'l off everything I buy at their store (Target)
3. My credit score is over 800, which saves me 60% on my house insurance.
4. If I ever do have to borrow money, credit score is good (not planning on it, but you never know what life will bring)
5. Security. I'd much rather have someone get my credit card # than my debit card #. With the debit card the cash is out of my account, and I have to convince my credit union it wasn't me. With credit card, I just dispute the charge and don't pay it - no money out of my pocket.
6. Convenience. I don't carry a lot of cash either - had my purse stolen once and learned my lesson.
7. Auto bill-pay. Again, I'd rather have the cable company make a mistake and have the error on the credit card, where I can dispute it, than out of my bank account.
I realize your all tired of seeing my comments, but I also want to rant about the distorted credit rating system. So in Seattle or San Antonio, an average debt is about $4,500. So what? At any moment I might have that amount charged on a card. Is transunion or experian saying that this is the average amount rolling from month to month? No, not even. Some pay every month, some don't. And some strategically do this and we all end up with generally a fair to good credit score. These scores ruin lives and have no sense of reality. My score today is fine, but OMG just have one mix-up in life and you're screwed by Mr. Fair Isaac. That guy should die a painful death and I hope he did or does. I did not pay a small bill for 4 months from a crap **** retailer (Pier 1) because they did not send a bill to MY address. They shifted my address to where my life was living for work in another state. It was maybe $300.00. So what would be the minimum payment? $5.00? Whatever, I did not get the bill and really did not know UNTIL I paid $29.00 a month for a ripp-off credit report (that I still pay for as these blood sucking aholes will ruin lives). This was well over 4 years ago, but still shows up as a huge mark against me, as in 100 points. I'm sorry, but I have paid more to credit cards than most people make in a lifetime but yet I have to tell the likes of BofA, Wells Fargo, Citi and JPMorgan this was not that big a deal. Of course they don't care as this give them a right to charge me a few bps for a refi. So, contrary to my previous post I am making a me cupla and saying that (1) credit is good when used smartly, but (2) I hate those MFs for their ability to screw people and that FICO sucks. Ever miss a hospital bill for $3.56 in the last 7 years??
let's all remember that this is the average credit card balance.... on a single credit card.... and most people have three or four. Of course we're ****ed as a nation because live in a unlimited mindset on a limited reality. "Man this great pair of shoes are on sale.... dang I don't have the cash right now... but I'll get paid next week so I'll just use that money even if I have to pay a little interest. *loses job next day*." I work a for the mortgage industry and a senior loan officer told me in his 20 yrs experience he could count the number of applicants that didn't already have over 20k in debt. Americans live in a fantasy world and the govt is trying it's hardest to keep that fantasy alive, both Rep and Dems they just offer different versions.
This is not about wants and needs. Both Wall Street and U.S. government NEED you to spend your money. 70% of GDP is discretionary spending. So, no this is not about wants, or needs. It is about slavery of the citizens, and 99.9% of us will never get out of this trap. Becoming wealthy beyond slavery just cannot happen today unless you suck it up (or you come up with the next gizmo and go public, but the gov't regulates that to death now). Maybe you can move to Idaho in the mountains and try to live off the we,we generally aint gonna do that. And if we do try to be libertarian, the gov't will go to war with us and shoot us down. Just shut up and play nice and pay your taxes and buy iPhones and we will all be fine. And invest at least 10% of your pay to retirement, or golly gee, if you don't you will have to eat cat food.
if you borrow 2-3K every month on your cards and pay them off every month, you are NOT carrying a balance.
I agree if no money no deal, wait and save. why give power over our lives to 3 stupid credit reporting burorats. Everybody that lives in the good USA should start regrouping as to how they want live to be here. The time of "Grandeur" is gone. only the super filthy reach can buy things now. We are becoming a 3 world country, my friends, whether you like it or not. If you want to think like this airhead "niagarafell" and think the banks or stocks are going to make you reach, wait for the next chaos in our society and you will see it all desappair again.
It is clear, either you are rich already and have the ability (know how) to move your money around, in which case you maybe safe for a while(emphasis added), or just become a cash basis type of a consumer. God forbid a tsunami or an earthquake as that in Japan here in the pacific, west, or gulf. we are done!!! Remember, we humans will never be able to control what planet earth or its CREATOR do. All we can do is pray to HIM.
Red states just have more belief that incomes won't be taxed to death, unlike in my state of IL where I just assume that if I have money saved or earn too much that liberals will get more and more of my money. I used to be a conservative but since I'm being pillaged by my neighbors who don't want to work or work hard I have given up on trying to build wealth as these lazy dems in this lasy state (CHI) want gov't to take care of them, at my peril. I'll get out of here soon, but not soone enough to watch the great liberal experiment implode my paycheck and the broken state of ILL.
How is debt a political issue? There are plenty of people suffering from credit card debt and medical debt and the like from both sides of the aisle. Money mismanagement doesn't seem to be a federal problem. It is a national problem. This is as political of an issue as the weather.
The only way this is a political issue is how you respond to this. Do you want to help dig people out of debt or force them to get even deeper in debt? The Democrats would say that they are the champions of the poor. The Republicans would be the champions for the rich. It's funny but if the Democrats were really for the poor the rich would not be winning, would they?
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