Dallas-Fort Worth, Deep in Credit Card Debt

Categories: News
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Late Wednesday, we received in the in-box this list of 25 cities ranked by the average amount of credit-card debt its residents carryin their back pockets. At the top of the pops was San Antonio with $5,177, but, as you can see, Dallas wasn't far behind at No. 5; says credit-reporting agency Experian, as of the December 2010 statements Dallasites were holding on to an average of $4,936 in plastic debt, which is actually down 4.5 percent from the same time last year. Nevertheless, says Experian's release, that's "15.2 percent higher than the national average." To which Money mag adds: "Out of the 25 cities with the highest levels of credit card debt, nearly all were located in the South."

Which isn't the worst news. Says Experian, once you add together the credit ratings from all three major reporting agencies -- including Experian, Equifax and TransUnion -- you get something called the VantageScore. Which, as The New York Times puts it, "gives a picture of whether the credit card spending came from economic confidence, or from desperation." The higher the city's score, the more likely its residents pay their credit-card bills on time and carry a higher limit. Says Experian: "Dallas is one of the cities with the lowest VantageScore in the country."

For further explanation, we turn to The Times and Maxine Sweet, vice president for public education at Experian:
The list of the 25 cities with the lowest VantageScores in December was heavily Southern. Texas had seven cities on the list (Harlingen, El Paso, Tyler, Waco, San Antonio, Dallas and Houston, going from lowest to highest credit scores). Other than two California cities (Bakersfield and Fresno) and Las Vegas, every other city on the list was from the South.

"Part of that is a lot just a lot of younger people moving in, and a larger migrant population -- so by younger, meaning not just in age, but also less depth in their credit history, and we think that's one factor," Ms. Sweet said of the lower credit scores in Texas in particular. "When you have these consumers who are in crisis with foreclosures and unemployment, that has to be driving up their credit card debt."
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16 comments
Allen Smith
Allen Smith

Thanks Mr. Robert for sharing such an informative article. It is rightly commented by the Experian: "Dallas is one of the cities with the lowest Vantage-Score in the country."I am really amazed to know that the Dallasites were holding on to an average of $4,936 in plastic debt towards the end of 2010, according to the December 2010 statements and that is down 4.5 percent from the same time last year. And this is the reason why Dallas was at number 5th spot. The combined report of including Experian, Equifax and TransUnion also approves that it wasn't the worst news at all.

Ed D.
Ed D.

A couple of years back, American Express sent my dog a pre-approved application for a gold card. A gold card! I can only assume his credit report was compiled by squirrels.

LaceyB
LaceyB

It's so easy to spend. All my friends do debit, and I would never go there, because I don't like anyone having any access to my account (not much there anyway, but still). I'd rather get air miles. I've done 3-4 trips over the last 2 years. What is the advantage not to spend?

GAA
GAA

I tell all my family and friends that they need to save their money. Don't spend it if you don't have it.

CJ
CJ

What they fail to explain (as I was in the mortgage industry in phx right before the bust), is that almost all other states allow a greater percentage of their homes to be refinanced.

Therefore, they paid off credit card debt with their over inflated home values.

I'd say we in Texas are still in better shape overall. Just wait until all those foreclosures hot those other states' citizens' credit scores...

TLS
TLS

I've never lived anywhere else that had such a "keeping up with the Joneses" mentality as it exists here. Cars, clothes, vacations, restaurants...it's very materialistic here and I think that is a big factor in the area's credit card debt.

Los Politico
Los Politico

Yes that, plus the piss poor wages and high middle class taxes.

Ivory
Ivory

I would have to agree with that theory. Dallas is the most pretentious city I have ever experienced. I was born here, lived here 35 years before leaving for 14 and I said I would never return because of this attitude. However, because of unforeseen circumstances have had to be here for the last three years. I believe it is worse now than when I left. I do wish that people were predisposed to living in their hearts more than their wallets here. I am embarrassed to tell many people where I am from when visiting foreign countries and even other cities in the US because of the outside perspectives on Dallas.

EDM
EDM

I agree the wages are lower than elsewhere in the country but that is the price you pay for the freedom of living in a Right to Work state.

I have to LOL at your remark about middle class taxes ...

Federal taxes are at nearly all-time lows (the only time they were lower was the frist year the income tax was introduced).

State taxes are not high enough to properly fund education, build new highways, or maintain the highways we have.

Local property taxes are capped which has directly contributed to the education funding crisis and local sales taxes are effectively controlled by the state so they are not going up.

scottindallas
scottindallas

That factoid about income taxes relative GDP is the most macro of stats. Dig deeper and both of you might well be right. As, corporate tax earnings are down, the tax rates on the wealthy are at all time lows. Meanwhile, tax rates on the middle class have done nothing but escalate. Obama actually cut the taxes for 2/3rds of the economy. But, he RAISED them on 1/3--the working poor. This is a trend that dates back to the end of prohibition. That was sponsored by the wealthy in exchange for an alcohol tax on everyone with a reduction in their taxes.

TimCov
TimCov

There is a reason that I am working on paying off all of my debt. My goal is to not owe a dime to anyone but my mortgage company in 5 years.

Los Politico
Los Politico

I'd just point out that in this study "Dallas" includes the burbs

Anonymous
Anonymous

well a lot of Dallas proper doesn't have access to credit cards anyways. they're using cash advances and title loans. just saying...

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