If I have 8 out 10 department store cards. Should I close most of them to increase my debt ratio
Americans started 2019 with more than $1 trillion in outstanding credit card balances, and we are on pace to begin 2020 in even worse shape. WalletHub projects a net increase of $80 billion in consumer credit card debt for 2019.
But not everywhere in the U.S. is in such hot water when it comes to credit card debt. Some cities are better at managing their finances and avoiding overspending than others. In order to determine where Americans have accumulated the most and least sustainable credit card debts, WalletHub drew upon TransUnion credit data to calculate the cost and time required to pay off the median card balances of more than 2,500 U.S. cities. Read on for our findings, additional insight from our panel of experts and a full description of our methodology.
|Percentile*||City||Median Credit Card Debt||Cost to Pay Off||Payoff Time (Income Adjusted)|
In order to determine the cities with the least and most sustainable credit card debts, we first looked at the median credit-card balances of residents in each of 2,564 U.S. cities as of September 2019, based on TransUnion data. Our analysis includes credit cards that carried a balance and excludes store cards. For our sample, we considered only the city proper in each case, excluding cities in the surrounding metro area.
Using WalletHub’s credit card payoff calculator and the median credit-card balance and income of residents in each city, we determined the required number of months to pay off that balance and the resulting finance charges. In order to do so, we made the following two assumptions:
Finally, we ranked the cities based on the calculator’s outputs. A 99th percentile rank corresponds with the city with the least sustainable credit-card debt – that is, the city with the longest payoff timeline.
Sources: Data used to create this ranking were collected from the U.S. Census Bureau, Federal Reserve and TransUnion.