Phoenix Among Cities With Least-Sustainable Credit Card Debt

PHOENIX, AZ — A recent study ranks the city of Phoenix among the worst of 2,564 U.S. cities rated on the sustainability of residents' credit card debt. The report, released Monday by WalletHub, gives a score of 99 to cities with the worst levels of sustainable credit card debt; Phoenix fell in at No. 80.

This year began with Americans carrying more than $1 trillion in credit card balances. WalletHub officials are forecasting an $80 billion net increase for this year’s credit card debt by year's end. Examining which cities will best be able to sustain such booming credit card debt, the organization’s rankings were based on data from the U.S. Census Bureau, TransUnion and the Federal Reserve.

The report’s findings are based on median credit card balances of each city’s residents, excluding store credit cards. The numbers are as of September 2019, and include only the city proper named, not neighboring metro area cities and towns.

Using a credit card payoff calculator and factoring in each city's resident income and median credit card balances, the number of months for balance payoff was determined, as were the corresponding finance charges. Data is based on a 3 percent debt payoff ability, where the 3 percent was derived from national median income and national median credit card debt.

All rankings only include income from full-time, year-round employment, and not money from other sources. The data is also based on the average finance charge of 16.97 percent.

Phoenix’s numbers looked like this:

• Median credit card debt: $2,633
• Cost to pay off: $1,046
• Payoff time: 53 months and 10 days
• Final overall ranking: 80 of a possible 99, with 99 as the worst score

Coming in just ahead of Phoenix was Houston, with all the same data and ranking except the payoff time was one day shorter. Just behind Phoenix was Palm Harbor, Florida, with median credit card debt of $3,053, cost to payoff at $1214 and payoff time also at 53 months and 10 days.

For those trying to climb out from under a mountain of credit card debt, WalletHub CEO Odysseas Papadimoutriou said, “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. Simply having a plan will make the task more digestible.”

Overturning one’s debt might still sound daunting, but there are small things that can be done to reduce expenditures for some, Papadimoutriou explained. “Taking steps to control costs – like brewing your own coffee, bringing lunch to work, etc. – are helpful, to be sure,” he said.

But if those changes aren’t feasible, another good idea might be to supplement one’s income instead, Papadimoutriou added.

The top-ranked city on the report was Cupertino, California, with median credit card debt of $2,408, cost to payoff at $215 and payoff time at 12 months and 8 days.