Consumer spending habits provide a key measure of economic activity, but these trends can vary significantly across regions. One way to observe how much consumers are spending is by looking at the credit card balances they carry. In addition to credit card debt, other types of loans—such as mortgages, personal loans, auto loans, and student loans—add to the monthly debt obligations that consumers face.

Recent data shows that credit card balances and monthly payments are rising the fastest in certain metropolitan areas, particularly in the U.S. Southwest, Florida, and some other major cities. Let’s explore the cities with the highest increases in credit card debt and monthly payments and understand the factors driving these trends.

Average Credit Card Balance and Monthly Payment Increase

Across the United States, the average credit card balance increased by 5.3% from June 2023 to June 2024, while the average monthly payment rose by 5.9%. But some cities have seen even greater jumps in debt.

U.S. Average Changes (June 2023 – June 2024):

• Average Credit Card Balance: $6,699 (+5.3%)
• Average Monthly Payment: $1,212 (+5.9%)

Now let’s dive into which cities are leading this surge in credit card debt.

Where Are Credit Card Balances Growing The Fastest?

The growth in credit card balances isn’t uniform across the U.S. Metros in the Southwest and Florida are experiencing the largest jumps. Below is a closer look at the cities seeing the sharpest increases:

1. McAllen, Texas

McAllen tops the list, with credit card balances growing at an alarming rate. The city has lower income levels compared to other areas but has seen a major rise in debt. McAllen’s growth in debt is partially attributed to increasing costs, such as insurance premiums and cost-of-living expenses.

2. Miami, Florida

Miami continues to experience rapid growth in credit card debt, driven by high property insurance premiums and rising living costs. Many residents are turning to credit cards to cover everyday expenses, pushing balances even higher.

3. Tampa, Florida

Tampa’s credit card debt growth has followed a similar pattern as Miami’s, with higher property costs and insurance expenses playing a significant role. Tampa’s increasing credit card balances highlight the broader financial strain felt by residents in Florida’s growing cities.

4. Phoenix, Arizona

Phoenix is another city where credit card balances are rapidly climbing. The rise is linked to increased housing costs and consumer spending. Many Phoenix residents are financing their day-to-day living with credit cards, contributing to the sharp rise in debt.

5. Orlando, Florida

Orlando has experienced fast-growing credit card debt, with residents facing higher costs across the board. Much like Tampa and Miami, rising property costs and tourism-driven economic pressures have led to an increased reliance on credit.

Other cities in the top 20 include Las Vegas, Nevada; San Antonio, Texas; Fort Lauderdale, Florida; Jacksonville, Florida; and Houston, Texas. These areas are seeing outsized increases in credit card balances, primarily due to rising housing costs, increasing insurance premiums, and other local economic factors.

Why Debt Is Higher in Certain Cities

Several factors are contributing to the growing credit card debt in the top 20 cities:

1. Rising Property Insurance Premiums: Many cities, particularly in Florida and the Southwest, are experiencing surges in property insurance costs. For instance, recent weather events and increased risk assessments have forced insurers to raise premiums, leaving homeowners with higher bills. As these costs rise, many consumers are turning to credit cards to bridge the gap.
2. Cost of Living: In cities like Miami and Phoenix, the cost of living continues to rise rapidly, outpacing wage growth in many cases. As a result, more residents rely on credit cards to meet basic needs, from groceries to utilities.
3. Deferred Maintenance Costs: In areas like Florida, new regulations are forcing condo and homeowner associations to address deferred maintenance issues, raising housing costs for residents. These extra expenses are contributing to credit card balance growth as residents face higher monthly costs.

Cities With the Largest Average Credit Card Balances

While some cities are seeing fast-growing credit card balances, others are home to consumers who consistently carry the largest balances. In these cities, high income levels and the cost of living play major roles in driving credit card debt.

Here are the top metros with the largest average credit card balances:

1. Bridgeport, Connecticut
2. Washington, D.C.
3. San Francisco, California
4. New York City, New York
5. Los Angeles, California

These cities generally have higher incomes, but their cost of living is also well above the national average. Higher prices for housing, goods, and services push residents to carry larger credit card balances.

Rising Monthly Payments Across the Country

Along with growing credit card balances, monthly payments have been increasing across the U.S. as well. Monthly payment obligations consist of minimum payments on credit cards, auto loans, mortgages, personal loans, and more.

Metros With the Largest Increases in Monthly Payments:

• San Francisco, California
• Los Angeles, California
• Orlando, Florida
• McAllen, Texas
• Jacksonville, Florida

Despite inflation subsiding in many sectors, consumers in these cities are still seeing their monthly debt payments rise. Many of these areas also have higher levels of student loan debt, contributing to the overall rise in monthly payments.

The Bottom Line

Consumers in cities with high credit card balances and growing debt face financial stress, especially as the cost of living and other expenses continue to rise. Areas in the Southwest and Florida, in particular, are experiencing outsized debt growth due to increasing property costs and economic pressures.

For those living in high-debt areas, managing credit card balances and staying on top of monthly payments is crucial to maintaining financial stability. Understanding how local economic trends affect your debt can help you make informed decisions about spending, saving, and paying down debt.

If you ever need expert assistance or guidance on your credit journey, don’t hesitate to reach out to the Nerds! Additionally, stay updated with the latest tips and information by following us on Facebook, Instagram and TikTok!