Columbia, DC Residents Faring Well With Total Credit Card Debt
With total credit card debt in the U.S. at nearly $1.3 trillion, the personal-finance website WalletHub today released its latest report on the Cities With the Most & Least-Sustainable Credit Card Debt to help illustrate how consumers are faring in different areas of the country.
| Cities With Least Sustainable Debts | Cities With Most Sustainable Debts |
| 1. Port St. Lucie, FL | 173. Lewiston, ME |
| 2. El Paso, TX | 174. Washington, DC |
| 3. Gulfport, MS | 175. Columbia, MD |
| 4. North Las Vegas, NV | 176. Madison, WI |
| 5. Miami, FL | 177. Seattle, WA |
| 6. Dallas, TX | 178. San Jose, CA |
| 7. Knoxville, TN | 179. Jersey City, NJ |
| 8. Brownsville, TX | 180. Irvine, CA |
| 9. San Antonio, TX | 181. San Francisco, CA |
| 10. Birmingham, AL | 182. Fremont, CA |
Full rankings: https://wallethub.com/edu/
National Stats
- Q3 Results Are Mixed: At $21 billion, the increase in credit card debt during Q3 2024 was around 31% smaller than the increase in Q3 2023.
- Debt Is Well Below the Peak: Total credit card debt as of Q3 was roughly $1.29 trillion on an inflation-adjusted basis, or around 13% below the record high.
- Early Q4 Results: Preliminary data for October 2024 shows a new record high for credit card debt in the month, in absolute terms. But when you adjust for inflation, there was just a 3% increase in credit card debt compared to the same month last year (and no new record).
- Household Debt Has Some Breathing Room: The average household credit card balance as of Q3 2024 was around $10,757 after adjusting for inflation. That’s $1,960 below the record high.
- Best Balance Transfer Credit Cards: The best balance transfer credit cards currently offer 0% APRs for up to 21 months, with no annual fees and low balance transfer fees.
Key takeaways and WalletHub commentary are included below in text and video format.
“In the cities with the least sustainable credit card debt, residents tend to have low median incomes, which contributes to larger than average credit card debts. As a result, people are only able to make small payments on their debts each month, stretching out the amount of time to get debt-free to as long as 8 years. This can lead to thousands of dollars in interest payments – in some cases, more interest than the amount of debt they currently owe.”
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“Port St. Lucie, FL, has the least sustainable credit card debt among 182 of the largest U.S. cities, as it will take residents with debt an average of nearly 101 months (8.4 years) to pay off what they owe. Some of the major reasons behind Port St. Lucie’s long credit card payoff timeline include the city’s high median credit card debt ($3,426) and relatively low median earnings for workers ($48,043). Residents will end up paying an average of $3,930 in interest by the time they get debt-free, according to WalletHub calculations.”
– Chip Lupo, WalletHub Analyst
Expert Commentary
What daily behaviors lead people to amass credit card debt?
“The daily behavior that leads people to amass credit card debt is the lack of a spending plan. People should be aware of the necessary expenses they would incur in a day, such as transportation, food, etc. After allocating a daily expenditure amount for the necessities, people can consider the amount that they can spend above the essentials. By having a budget of essential vs. non-essential spending, people can have better control over how much they can spend and not spend, and not make purchases above that amount. People should spend non-essential purchases if funds were already allocated to such purchases, otherwise, the excessive denial of their spending would sometimes cause higher, revenge spending in the future.”
Joanne Guo, Ph.D. – Assistant Professor, St. Joseph’s University, New York
“Although credit cards can, when used responsibly, be an excellent way to establish a credit history, many people simply outspend their earnings and savings when relying on plastic to pay. Purchasing with a tap of a card may provide consumers with an immediate sense of gratification. Paying with plastic also allows consumers to temporarily avoid the stress and immediate financial burden that often accompanies the need to forfeit the cash one has on hand to pay for an extravagant purchase. Impulse shopping and delaying payments can give consumers a false sense of financial security. Moreover, consumers who have multiple credit cards, with different reward programs that entice them to pay with plastic, may find that they are unaware of the total amount spent on all of the cards used.”
Marla A. Sole, Ph.D. – Associate Professor, Guttman Community College
What is the biggest mistake people make when managing credit card debt?
“The biggest mistake they make is neglecting to note the interest rate charged by various credit cards. Also, people often neglect to pay on time and, thereby, incur late penalties. More simply, people fail to keep track of the credit purchases they make every month… If the card permits the user to carry over a balance, pay as much over the minimum payment required as possible. There is no real advantage to just paying the minimum required payment. One will end up paying more over a longer period.”
Anthony J. Greco, Ph.D. – Professor, University of Louisiana at Lafayette
“Having overspent, consumers might be enticed by the offer on every credit card statement to make only the minimum payment. However, failing to pay your credit card bill in full each month will add exceptionally high-interest charges, increasing the total amount owed. Additionally, having spent beyond their means, consumers could miss making a payment. Skipping payments adds interest to the principal owed in addition to taking on late payment fees. These two seemingly attractive options delay the inevitable pain of paying while simultaneously increasing consumer debt and putting consumers credit scores at risk.”
Marla A. Sole, Ph.D. – Associate Professor, Guttman Community College
How does the growth of credit card debt affect the economy?
“The growth of credit card debt affects the economy in that it decreases the amount of savings, and that in turn decreases the flow of savings into other productive activities, such as channeling the savings to purchase capital by businesses.”
Joanne Guo, Ph.D. – Assistant Professor, St. Joseph’s University, New York
“The growth of credit card debt ‘crowds out’ spending on current expenses! Individuals must then purchase less in the future to pay for past purchases and may even have to lower their standard of living to pay off old credit card debts. When consumers cut back at the macro level, there is less demand for current products and services, then slowing down the circular flow of money and reducing the multiplier effect. Yes, financial institutions are making money on the outrageous interest rates charged by credit card companies, but no new products and services are being produced.”
Connie Harris Ostwald, Ph.D. – Lead Faculty, Economics, Colorado Christian University
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