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American Credit Card Debt

What American City has the Least Credit Card Debt?

Credit card debt is a very serious problem in today's world. Financial statistics show that about 40% of US families spend more than they earn. As a result, they accumulate a large debt. Fortunately, the biggest part of the consumers can manage their money wisely. Trouble-free regions are situated in different parts of the country. Let's look at the cities whose residents can show the best examples of smart financial behavior.

Men's Health magazine conducted financial survey that ranked 100 American cities by several categories ranging from bankruptcies to the level of credit card debt. Editors took into consideration the recent personal bankruptcy rates and Experian's statistics on average credit scores, credit card debt and available credit used per person.

According to the survey, cities that have the least credit card debt include Lincoln (NE), Charleston (WV), Jackson (MS), Memphis (TN) and El Paso (TX). Their residents make smart financial decision even in the difficult financial environment. Responsible spending combined with paying credit card bills on time lets them save lots of money in the long run.

People, who live in Lincoln (NE), Jersey City (NJ), New York (NY), Newark (NJ) and Yonkers (NY) can boast of the lowest debt/available credit ratio (also called the utilization ratio). It is also remarkable that this list includes 4 cities from California - Fremont, Oakland, San Francisco and San Jose. Who knows, maybe warm and sunny climate makes their residents spend less?

People who can control their expenses have no need to file for bankruptcy. So there is nothing surprising that you can find cities from the above lists in the category "Cities with the least number of people filing for bankruptcy". It includes Yonkers (NY), Anaheim (CA), Honolulu (HI), San Francisco (CA) and San Jose (CA).

Why aren't all American cities so financially successful? According to the financial experts, there are several reasons why people accumulate debt. First of all, it is the collapse of the subprime mortgage market and the following financial crisis. Slowing economic activity, job losses, slumping home values and raising gas and food prices strain the budgets of many Americans.

The next reason is the tighter lending rules. It seems that the days of easy credit have gone: some credit card issuers lower credit limits and raise interest rates. Moreover, banks have cut back on the popular home equity loans.

Some people accumulate debt because they "try to keep up with the Joneses." They want to match their neighbors in spending and social standing. Credit cards give such people an excellent opportunity to buy a bigger house, a SUV, gym memberships, designer clothes and shoes, high-tech TVs, computers and other electronic gadgets. However, it is difficult to pay off such big charges.

The next reason why American consumers accumulate debt is the low level of financial literacy. People are not fully uninformed about all credit card terms and features. Ill-considered financial management can lead to bad credit and, as a result, to high interest rates in future. So it is necessary to educate people to understand financial products and apply for a new credit card that will suit their personal spending habits and needs best.

Comments

John
06:19 AM, August 18, 2008
Wow, I live in California!
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