Ahead of Holiday Season, Consumers Carry High Credit Card Balances

Consumers in the U.S. carry high credit card balances, now estimated at around $800 billion. This is the highest amount since 2009, the year after the stock market crash and right in the middle of one of the worst recessions in recent memory.

While every forecast for this holiday season talks about record sales and the U.S. is enjoying super low unemployment, the high credit card balances are a bit of a concern.

LendingTree, a leading online loan marketplace, decided to take a look at the data and find out the best and worst states with credit card balances.

The first graphic shows the cities with the most-maxed out consumers.

Image: LendingTree

San Diego, CA is the most maxed out city with a credit utilization average of 32.8%, followed by Los Angeles, CA with 32% and San Antonio, TX with just below 32%.

The second graphic shows the cities with the least maxed-out consumers

Image: LendingTree

Here the top three are Greenville, SC (27.6%), Milwaukee, WI (28.4%), and Cleveland, OH (28.9%).

What Does This Data Mean?

Despite a good economy, U.S. consumer debt is very high. This may indicate lingering remaining credit balances from the economic crash of 2008.

It may also indicate a confidence by consumers they can manage the balances on credit cards they are using. In other words, they are not afraid to use credit to make larger purchases as they feel they can get them paid off.

But when looking at the metro areas in both graphics, higher utilization of credit lines appears to be more prevalent in areas with a higher cost of living. Consumers in San Diego, Los Angeles, New York, may use their credit cards to buy necessities for daily life.

Houston and San Antonio may be on the list of higher credit balances due to Hurricane Harvey.

On its own, the data is a fascinating macro look at the credit card usage patterns in the U.S. From top to bottom, the difference is about five percentage points between metro areas, and consumers seem to have 67% to 72% of their credit lines available for this holiday season.

What do you think this data represents? Do you believe you can make an assessment of marketing strategy from this information? Drop us a line in the comments section below.


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