Putting consumer debt into perspective
Because different areas of the country are affected by regional and national economic conditions in unique ways, it’s important to analyze issues like bankruptcy and foreclosure rates on a smaller scale before making generalizations about state of the national economy. And when it comes to credit cards and personal debt owed by individuals, determining regional figures can aid in comparing one’s financial situation to that of his or her neighbors. A recent study sheds light on where Miami, Florida, stands in terms of residents’ average credit ratings and personal debts owed.
According to a survey conducted by the credit bureau Experian, the average credit score of residents of the cities studied has not changed from 2010, and is hovering at 665. The average score for individual cities does vary, however. Despite the fact that the average credit rating in Phoenix increased the most within the past four years, the figure remained the lowest of all, averaging out at 654. Interestingly, the average credit rating in Detroit was higher than the overall average, reaching 667 out of 850.
The survey also looked at the average amount of debt carried by residents in several cities. Again, people living in Detroit maintain the least amount of debt, averaging out at a little more than $23,600. That is compared to the overall average of almost $26,000. Debts acknowledged in the survey include everything from auto loans to credit cards to student loans.
The overall amount of personal debt maintained by residents across the country has increased by around five percent in the past four years, Miami and Los Angeles are just behind Detroit for the least amount owed. Interestingly, it is noted that an increase in national personal debt may actually be a sign that the economy is improving.
Source: Time, “Is Your City Drowning in Debt?” Martha C. White, May 7, 2014