Millions of Americans are seeing red. This is the time of the year when many open up their credit card bills (or click on their e-bills) and see how much money they blew over the holiday season. Money they couldn’t afford to blow on alcohol, gadgets and travel.
At the end of 2015, consumers finished off the year with more than $900 billion on credit cards. However, a new report from CardHub.com shows that some consumers in different areas of the country ended the year in a bigger hole than others.
For instance, Beverly Hills maintained the highest average credit card debt in the country with $13,583. The lowest, meanwhile, was in Clarkston, Georgia, which had the lowest average credit card debt with just $2,705.
Overall, the average credit card debt per household was a little bit more than $8,000.
Here are the cities with the highest average credit card debt:
Beverly Hills, CA: $13,583
Darien, CT: $12,858
Westport, CT: $12,220
Southlake, TX: $11,512
Greenwich, CT: $11,255
Highland Park, IL: $11,111
Colleyville, TX: $11,107
Manhattan Beach, CA: $10,721
Lake Forest, IL: $10,462
Calabasas, CA: $10,444
Here are the cities with the lowest average credit card debt:
Clarkston, GA: $2,705
Camden, NJ: $2,850
Coachella, CA: $2,965
San Luis, AZ: $3,028
Hamtramck, MI: $3,148
Delano, CA: $3,150
Adelanto, CA: $3,155
Laguna Woods, CA: $3,300
Bell Gardens, CA: $3,343
Lauderdale Lakes, FL: $3,374
The problem with credit card debt is that very few people ever get the balance down to zero, unless they die. I only have my wife on one of my credit card accounts and if I die before the debt is paid off, she knows she does not have to pay any of the accounts that are in my name only. Since the debt is based on my income only, the banks will have to charge it off. Not my problem, I will be dead. But I am now using 40% of my monthly income, instead of 20% to pay the debt off in 15 months. I will save over $1800 in interest just by doubling the monthly payments. The interest savings and the need for more money in the monthly budget, in the future, is the best reason to be debt free.
In the last 40 years, because of low wages, most have used credit to maintain the illusion of a middle class standard of living. No one asks what the total cost of the credit equals, just what is the monthly payment. We have become a monthly payment Nation. The bankers love it, but it robs people of money that could be saved for retirement, education, or emergency funds. So, most are trapped in the cycle of using high interest credit card debt, when there is more month left at the end of their money.
I notice that most of the cities with the high credit card debt are cities with higher income levels, so as a percentage of income their debt is not hurting their credit score as much as high balances on credit card debt hurt the poorer borrowers.
Also, many of the cities that have low credit card debt have lower income levels or are retirement cities and many older retirees have 1 or 2 people living in the household, so they spend less. Total credit card debt by city means nothing without knowing family income levels and how many are behind on payments.