Credit card debt is by no means, an isolated problem. However, the team at CreditCards.com recently looked at the balance on the average person’s credit cards in the 25 largest cities in the United States. The data was supplied via credit reports from credit bureau Experian.
Across the United States, an average balance of $4,410 would take a typical working person 13 months to pay off, costing $327 in interest. CreditCards.com came up with that number by using 15% of the median earnings for each city—which is a rule of thumb for credit counselors setting up debt repayment plans.
However, the debt numbers varied significantly from location to location. Among the 25 metro areas surveyed, New York City, Minneapolis, Washington D.C., and Boston ranked near the bottom of the debt pile. New York City debt takes 11 months to pay down, with interest of $293. Minneapolis is also 11 months, at $266. Washington D.C. and Boston both take 10 months to pay down, with $286 and $267 in interest respectively.
Meanwhile, the San Francisco/Oakland/San Jose area takes only nine months to pay down its credit card debt, earning $234 in interest. Matt Schulz, CreditCards.com’s senior industry analyst said, “It’s interesting that the metro areas with the highest average credit card debt don’t necessarily have the highest debt burdens when adjusted for income. For example, Washington, D.C. has the nation’s highest average credit card debt [$5,046 per card], but since it has the highest median income in the U.S., its debt burden is lower than all but two metros.
The Federal Reserve Bank of New York noted that credit card debt increased by $17 billion last year, raising the total to $700 billion. That puts credit card debt in fourth place behind U.S. mortgage debt ($8.17 trillion), student loan debt ($1.16 trillion), and the value of every U.S. car loan ($955 billion), but still exceeds the value of all home equity loans ($510 billion).
The average per-card debt carried per person varies, with some as low as $1,098 for individuals who don’t carry a balance to $7,743 for those that do. TransUnion puts the national average debt in the middle, at $5,234 per person. However, that’s still less than the pre-recession average of $6,276 in 2008. Nonetheless, the debt has crept steadily upward, even as the number of U.S. households with credit cards carrying debt has decreased from 44% n 2009 to 34% today.
There is no reason to carry a huge credit card balance if you can pay it down. There are a variety of ways to minimize your debt, but cardholders must know that paying the minimum payment won’t get you anywhere. If you need help figuring out how to balance your debt, contact an advisor at Apex Financial Advisors today. We can help you schedule payments to pay that bill down quickly and ultimately save money in the long run.