Wealthiest Cities Have Highest Percentage of $10,000+ Credit Card Debt
Jun 19th, 2019 @ 8:46 PM by Amber Nelson
A new report from LendingTree’s CompareCards found that cardholders are most likely to have to have five-figure credit card balances if they live in the richest and largest U.S. cities. In fact one in six borrowers in the biggest cities have credit card debt of $10,000 or more.
Bridgeport, Conn. topped the list of residents with $10,000+ credit card balances, with 22.9% of card holders in the area holding at least five-figures in card debt. And among those, 1.9% had credit card balance of more than $50,000. The other cities at the top of list included Virginia Beach, Va., Washington D.C., New York City, Los Angeles, Hartford, Conn., San Diego, Albany N.Y., Oxnard, Calif. and Baltimore.
“What we found is that most of the cities with the biggest percentages of people with five-figure credit card debt are clustered along the East Coast and West Coast,” wrote LendingTree author Matt Schulz. “Often, it is the wealthiest cities — not the less affluent ones as one might expect — that carry the biggest credit card balances.”
The large metro areas with the smallest share of $10,000+ credit card debt holders started with Winston-Salem, N.C. with only 12.4%. The rest of the bottom 10 cities in order were Indianapolis, Greensboro, N.C., Colorado Springs, Colo., Chattanooga, Tenn., Jackson, Miss., Knoxville, Tenn., Grand Rapids, Mich., Provo, Utah, and Birmingham, Ala.
The report also found that many of the cities with the largest share of borrowers with five-figure credit card debt were among the cities with the greatest income inequalities in the nation. In places where there is a large population of uber-rich as well as the very poor, both are using credit cards for purchases but for different reasons. While the poor are using credit cards just to survive in these expensive areas, the wealthy are using cards for large financial projects, like business development, home renovations, or major travel expenses. The poor in these areas often start with small balances that keep getting bigger, but the wealthy can pay off their large balances often enough that the interest rates and fees do not cause financial stress.
Amber Nelson is a seasoned mortgage industry writer and a regular contributor to Loan.com and Mortgage101.com.