With the economy still on shaky ground as COVID-19 cases rise and the holiday shopping season kicks into gear, the personal-finance website WalletHub today released its report on 2021’s Cities with the Least-Sustainable Credit Card Debt, in addition to its latest Credit Card Debt Study. Please find key takeaways below, along with commentary from WalletHub (audio files included).
Credit Card Debt Study Key Stats
- Consumers repaid more than $119 billion in credit card debt through the first three quarters of 2020 – an all-time record.
- For the first time in 35 years, consumers paid down credit card debt during the third quarter of the year.
- Credit card debt rose by $76.7 billion during 2019, and WalletHub now projects a decrease of $89 billion in 2020.
- Credit card charge-off rates are down 17.3% compared to Q2 2020.
- The best balance transfer credit cards currently offer 0% APRs for the first 12-20 months with no annual fee and balance transfer fees as low as 3%.
|Least-Sustainable Credit Card Debt||Most-Sustainable Credit Card Debt|
|Magnolia, TX||Cupertino, CA|
|Park City, UT||Sunnyvale, CA|
|Cumming, GA||Mountain View, CA|
|Dahlonega, GA||Saratoga, CA|
|Jacksonville, NC||Foster City, CA|
|Richmond, TX||Scarsdale, NY|
|Leesville, LA||Palo Alto, CA|
|Cottonwood, AZ||Los Altos, CA|
|Boerne, TX||Milpitas, CA|
|Raeford, NC||Santa Clara, CA|
|Willis, TX||Chevy Chase, MD|
|Wasilla, AK||Bronxville, NY|
|Ooltewah, TN||Fremont, CA|
|Dumfries, VA||Belmont, CA|
|St. Augustine, FL||Lexington, MA|
|Hialeah, FL||Seal Beach, CA|
|Buford, GA||Redmond, WA|
|Hinesville, GA||Dublin, CA|
|Miami, FL||Falls Church, VA|
|Ewa Beach, HI||Cambridge, MA|
Q&A with WalletHub Analyst Jill Gonzalez
What do the latest credit card debt statistics tell us about the health of U.S. consumers?
“The more than $119 billion in credit card debt that U.S. consumers have repaid during the first three quarters of 2020 is actually one clear silver lining of the pandemic,” said Jill Gonzalez, WalletHub analyst. “Paying off debt is one of the best ways to pandemic-proof your finances, and too many of us were way far too overextended at this time last year, so it’s great that we’ve collectively cut back.”
How will credit card debt levels look after Q4 data comes in?
“WalletHub is projecting consumers to add about $30 billion in credit card debt during the fourth quarter of 2020, leaving us with a decrease of about $89 billion in credit card debt for the year,” said Jill Gonzalez, WalletHub analyst. “If consumers do end 2020 owing less credit card debt than they started with, it would only be the second time in at least 35 years that’s occurred, with the other time being in 2009.”
What advice do you have for people trying to get out from under credit card debt?
“People trying to get out from under credit card debt should start by making a plan to pay off as much as they can afford each month in order to get debt-free as quickly as possible. The longer you wait to pay off credit card debt, the more expensive it becomes,” said Jill Gonzalez, WalletHub analyst. “Additionally, people shouldn’t forget about the income side of the equation when approaching debt problems. It might be more efficient for some people to supplement their income instead of taking a lot of minor steps to control costs.”
Please let me know if you have any questions or if you would like to arrange a phone, Skype or in-studio interview with one of WalletHub’s experts.