The stress of credit card debt is often felt the most at the end of the year, since Americans tend to put more on the plastic during the holiday shopping season. In fact, data from Experian shows that credit card debt has peaked in the fourth quarter for the past eight years. While playing Santa can make credit card statements more intimidating if you don’t have enough saved up as the year comes to a close, credit card debt afflicts Americans year-round.
In a new study, SmartAsset uncovered the places where U.S. residents tend to rely on credit the most. Using data from Experian and the Census Bureau, we ranked 47 metro areas based on five metrics relating to credit card debt. For more details on our data sources and how we put all the information together to create the final rankings, check out our Data and Methodology section below.
- Metro areas in Texas, Florida and North Carolina rank high. Of the top 10 places where people rely on credit the most, the majority are located in Texas, Florida and North Carolina. In fact, only two other states, Georgia and Virginia, make appearances in the top 10.
- Credit card debt as a percentage of income varies significantly. Across the 47 metro areas in our study, average credit card debt as a percentage of median household income ranges from almost 14% to just below 6%. Across the 47 metro areas in our study, average credit card debt ranges from 6% of the median household income in the San Francisco area to 14% in the Hinesville, Georgia metro.
1. Miami-Fort Lauderdale-West Palm Beach, FL
Average credit card debt per borrower increased by 4.06% over the past year in Miami-Fort Lauderdale-West Palm Beach, Florida, the fourth-highest increase over that time period of any area in our study. Specifically, in 2018, average credit debt was $6,651 and in 2019, it reached almost $7,000. Residents in the Miami metro area may find that debt more difficult to pay off as it makes up a large percentage of the median household income there. We estimate that average credit card debt as a percentage of median household income is 12.29%, the seventh-highest rate for this metric of all 47 metro areas in our study.
2. San Antonio-New Braunfels, TX
At the end of the second quarter in 2019, Experian reported that the average credit card debt for borrowers in San Antonio-New Braunfels, Texas was $7,093. This is the ninth-highest of any metro area in our study and the sixth-highest amount as a percentage of median household income. Additionally, 2018 Census data showed that 15.4% of the total population fell below the poverty line, the sixth-highest rate in the study for this metric.
3. Killeen-Temple, TX
Approximately 70 miles from Austin, Killeen-Temple, Texas ranks third on our list of places where residents rely the most on credit. On four of the five factors we examined, Killeen-Temple ranks in the bottom third of all metro areas in this study. It ranks the fifth-worst overall for average credit card debt as a percentage of median household income, at 12.94%. Its September 2019 unemployment rate, 3.6%, was 0.1% higher than the September 2019 national rate, and ties for ninth-highest of all metro areas in our study.
4. Houston-The Woodlands-Sugar Land, TX
Average credit card debt per borrower surpassed $7,000 in Houston-The Woodlands-Sugar Land, Texas at the end of second quarter of 2019. The Houston metro area also has relatively high unemployment and poverty rates – ranking in the bottom 25% of the study in both of these metrics – suggesting that credit card debt may be more difficult for local residents to pay off. Financial advisors may help with debt management. Take a look at our list of the top financial advisors in Houston.
5. Hinesville, GA
Over the past year, average credit card debt per borrower in Hinesville, Georgia increased the most of any metro area in our top 10 and second-most overall, at 4.88%. In 2018, average credit debt was $6,189, and in 2019, it was $6,491. Credit card debt makes up approximately 14% of the metro’s household income, the highest rate for this metric in the entire study.
6. Jacksonville, NC
Though average credit card debt decreased in Jacksonville, North Carolina over the past year, credit debt as a percentage of income remains high. Credit debt as a percentage of median income in Jacksonville is 13.72%, the second-highest of any metro area across all 47 metro areas we considered. Jacksonville residents may also have more difficulties in paying off credit debt as unemployment is above the national average there. The unemployment rate was 4.1% in September 2019, the fifth-highest rate for this metric in the study.
7. Virginia Beach-Norfolk-Newport News, VA-NC
The Virginia Beach-Norfolk-Newport News, Virginia-North Carolina metro area has the highest average credit card debt per borrower, at $7,444, of any area in our top 10 and the fourth-highest in the study overall. High credit debt figures in the Virginia Beach metro are somewhat offset by relatively lower levels of unemployment and poverty. The most recent unemployment rate was 2.7%, tied for 13th-lowest of the 47 metro areas, and the 2018 poverty rate was 11.2%, tied for 21th-lowest.
8. Jacksonville, FL
Average credit debt increased by 1.88% over the past year in Jacksonville, North Carolina, and it is relatively high in gross terms and as a percentage of the median household income in the area. At the end of the second quarter in 2019, average credit card debt per borrower was $6,919 in the area, the 16th-highest rate for this metric in the study. Additionally, as a percentage of median household income, credit debt was 11.49%, the 11th-highest of all metro areas in our study.
9. Dallas-Fort Worth-Arlington, TX (tie)
The most populous metro area in our top 10, Dallas-Fort Worth-Arlington, Texas had the seventh-highest average credit card debt per borrower in the study, at $7,102. The Dallas metro area also ranks in the worse half for its high unemployment and poverty rates. In September 2019, about 3.1% of the labor force was unemployed and in 2018, about 11.2% of residents fell below the poverty line.
9. Tampa-St. Petersburg-Clearwater, FL (tie)
Tied with Dallas-Fort Worth-Arlington, Tampa-St. Petersburg-Clearwater, Florida has the ninth-highest ratio credit card debt to income in the study. Specifically, we estimated that average credit card debt as a percentage of median household income is 11.99%. Credit debt has also risen over the past year by 2.44% in the Tampa metro area, the 15th-highest percentage increase overall.
Data and Methodology
Experian’s November 2019 report identifies the 50 metro areas in the U.S. with the highest average credit card debt balance per borrower. In this study, we considered 47 of those 50 areas for which complete data was available. In order to rank the metro areas where residents rely on credit the most, we considered the following five metrics:
- Average credit card debt. Data comes from Experian and is for March 2019.
- One-year change in average credit card debt. Data comes from Experian and is from the beginning of Q3 2018 through Q2 2019.
- Average credit card debt as a percentage of median household income. This is the average credit card debt (per borrower with credit card debt) divided by median household income. Data for average credit card debt comes from Experian and data for median household income comes from the Census Bureau’s 2018 1-year American Community Survey.
- Unemployment rate. Data comes from the Bureau of Labor Statistics and is for September 2019.
- Percentage of the population below the poverty level. Data comes from the Census Bureau’s 2018 1-year American Community Survey.
First, we ranked each metro area in every metric, giving a double weight to average credit card debt and debt as a percentage of median household income, giving a full weight to one-year change in average credit card debt and giving a half weight to unemployment rate as well as percentage of the population below the poverty level. We then found each area’s average ranking and used this average to determine a final score. The metro area with the best average ranking received a score of 100. The metro area with the worst average ranking received a score of 0.
Tips for Managing Debt
- Create a plan to pay it off. Credit card debt can be incredibly stressful, even if it results from playing Santa Claus. Our credit card calculator is here to help. By adding some information about your credit card spending habits, you can calculate the total interest and time it will take you to pay off your debt.
- As you buy stocking stuffers, mind your budget. The surefire way to avoid credit card debt is by staying within budget. Try out a trusty budget calculator to rein in your spending effectively.
- Consider a financial advisor. A financial advisor can help you make smarter financial decisions to be on top of your money from a strategic standpoint and to get previous debt under control. Finding the right financial advisor who fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
Questions about our study? Contact us at email@example.com
Photo credit: ©iStock.com/spyderskidoo