San Antonio has highest credit card debt burden – San Antonio Express-News
- July 26, 2015
It was a poor showing for the Lone Star State, with Dallas-Fort Worth landing right behind San Antonio and Houston four spots back on the list of the areas with the highest debt burden.
“The old saying that everything’s bigger in Texas certainly seems to apply to credit card debt burden,” said Matt Schulz, CreditCards.com’s senior industry analyst in Austin.
It would take a San Antonio resident earning the area’s median income 16 months and $448 in interest to pay off the average credit balance, the website concluded. By comparison, a denizen of the San Francisco Bay area — found to have the lowest credit card debt burden — would need only nine months and would have to pay $234 in interest to get his or her credit card balance down to zero.
The findings show that San Antonio residents, when compared with people in other areas, haven’t gone hog-wild using the plastic. Rather, it’s more about the amount they earn.
San Antonio had the third-highest average credit card balance — $4,880 — of the 25 metro areas. Yet that was only $743 more than the area with the lowest balance, Riverside-San Bernardino, California. That area had an average balance of $4,137. The U.S. average was $4,410.
The median annual earned income for San Antonio residents, though, was second-lowest at $27,491 — or about $18,420 less than the $45,909 median earned income in Washington, D.C., the highest of all metro areas.
“Sometimes the cost of life ends up going on a credit card bill,” Schulz said. “It doesn’t necessarily mean that you are a bad money manager if you have credit card debt.”
Christina Ponder, a certified consumer credit counselor in San Antonio for GreenPath Financial Wellness, wasn’t surprised to learn that San Antonio topped the list. She has a lot of fixed-income clients who struggle to pay everyday expenses.
“You’ll see that those clients have to have some type of extra income to fill the gap, and they will be using their credit card,” Ponder said. She previously worked in New York, but she said credit card debt is more of a problem in San Antonio. New Yorkers’ debt problems have more to do with the high cost of housing, she said.
Last year, GreenPath acquired Consumer Credit Counseling Service of Greater San Antonio.
San Antonio’s huge military presence may have played a part in the results, Schulz surmised. “There’s been a lot written about military members and some of the issues that they’ve had with debt,” he added.
In preparing the ranking, CreditCards.com used the average credit card balance per person in June 2014, as reported by Experian. The website used Census Bureau figures for 2013 median earnings for people age 16 and over.
CreditCards.com assumed an interest rate on the credit card debt of 13 percent, which the Federal Reserve determined is the average for credit card accounts that carry a balance. The website also assumed that card holders would devote 15 percent of their income toward paying their credit card expenses.
CreditCards.com has an online calculator (www.creditcards.com/calculators/payoff.php) that allows users to figure out how long it would take to pay off credit card debt.