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Experian ranks cities by card debt

By Leslie McFadden ·
Thursday, March 3, 2011
Posted: 4 pm ET

Did you rack up a lot of holiday debt on your credit cards? If so, you're not alone. The average person owed more than $4,200 in bankcard debt at the end of 2010, according to research released Wednesday from Experian, one of the three major credit-reporting agencies. On the bright side, December credit card debt was down more than 4 percent compared to 2009 data.

Residents of some cities were deeper in credit card debt than others.

In a press release, Experian listed the 25 American cities with the highest amount of bankcard debt in December 2010. San Antonio lead the pack with an average bankcard balance of $5,177; followed by Jacksonville, Fla., with an average balance of $5,115; and Atlanta with an average debt of $4,960. Another Florida city, Orlando, ranked the lowest on the list with $4,525 in credit card debt.

Though Americans had less credit card debt than in the previous year, they were using more of their available credit. Average utilization on credit cards was more than 30 percent, up nearly 10 percent since 2007. The surge was due in part to the fact that Americans don't carry as many credit cards. The average number of cards held has dropped 23 percent since 2007, to 1.97 cards.

When utilization climbs, your credit score can suffer. That's true anytime of the year, not just around the holidays. A big component of FICO credit scores is how much debt you have, part of which comes from how much available credit on revolving accounts such as credit cards is in use. According to FICO, people with the highest FICO scores have credit utilization rates of 7 percent or less.

If you have credit card debt, tackle your balance using a pay-down strategy.

How much of your holiday expenses did you charge to your credit cards?

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Randy Klein
March 07, 2011 at 9:25 pm

Thank you for your reply, but it did not address my concern. Your reply is correct about credit scores (which is why when I want my credit score to be at its best, I pay all but about $10 of my balances BEFORE the statement dates).

My concern, however, was that when Americans in significant credit card debt compare themselves to others using the most widely published values, they get a false sense of the actual situation, and this leads them to believe if everyone else is in my situation, why should I try to do better. It creates a false sence of normalcy and complacency.

Leslie McFadden
March 04, 2011 at 11:49 am

@Randy Klein

Experian used a statistically relevant sample from their consumer credit database. You're right in that those balances wouldn't distinguish between balances actually carried over and balances that were about to be paid off -- credit reports do not make this distinction. In the context of credit utilization and credit scores, however, these "balances" are still relevant. Your credit utilization, which in turn affects your credit score, relies on the monthly balance information from your credit report. If you pay your cards in full each month the balances on your credit report may not be zero. The amount listed will reflect your account balance at the time the lender supplied it to the credit reporting agency.

Randy Klein
March 03, 2011 at 9:58 pm

How did Experian (or their source) obtain and evaluate their data?

In July of 2007, Liz Pulliam Weston observed:

"I've been pointing out the gap between the myth of credit card debt and the reality for more than five years, dating to when the figure typically used was closer to $8,000. As far as I can tell, the myth stems from figures published by, which tracks credit card trends. CardWeb totals up the amounts owed on credit cards at the end of each year, then divides that sum by the number of households it says have at least one credit card to come up with an average-debt-per-household figure. The total includes amounts charged on cards by businesses as well as by consumers, and it includes balances that are about to be paid off as well as those that will be carried into the new year."

During 2010, my wife and I put $10,000 for an auto downpayment on a credit card, $4,000 in carpet, $7,000 in electronics and furniture, etc. for the cash rebates (1.5 percent at Fidelity). For all of these purchases we had the cash in hand, and paid for them during the grace period, no interest paid. For years my sisters both put their kids' out of state college tuitions on credit cards for the points, also paying in full during the grace period. Many people who travel for work routinely have thousands of dollars on their credit cards for which they are reimbursed as soon as they file their company expense reports (I used to be one of them). And as Liz points out, there are many other ways that businesses use credit cards.

So, I think you need to explain exactly what Experian did and did not include and how they calculated their final values.