WASHINGTON–A new study of credit card debt has found consumers paid off a record $60 billion of the $1 trillion they owe to credit card issuers during the first quarter, but during 2020 the same study is also projecting consumers will rack up an additional $140 billion this year.
The 2020 Credit Card Debt Study from WalletHub further identifies the U.S. cities where residents have done the best job of paying down debt, and the worst. The data is based on a comparison of 2,500 cities and reflects the change the occurred during Q1.
Cities With Biggest Debt Paydown
- Ewa Beach, Hawaii
- Darien, Conn.
- Southlake, Texas
- Westport, Conn.
- Beverly Hills, Calif.
- Colleyville, Texas
- Collegeville, Penn.
- Scarsdale, N.Y.
- Greenwich, Conn.
- Waipahu, Hawaii.
Cities With the Lowest Debt Paydown
- Mason City, Iowa
- Camden, N.J.
- Paradise, Calif.
- Clarkston, Ga.
- Sun City West, Ariz.
- Inkster, Mich.
- Barberton, Ohio
- Sun City Center, Fla.
- Wisconsin Rapids, Wis.
- Laguna Woods, Calif.
‘So Tantalizing’
“The latest credit card figures are for the first quarter of 2020, before the coronavirus pandemic began to really wreak havoc in the U.S.,” said Jill Gonzalez, WalletHub analyst. “It’s common for consumers to pay down credit card debt during the first few months of the year, as this is when many people receive annual salary bonuses and tax refunds. This year’s first-quarter paydown was just a lot bigger than normal - at least 50% higher than anything we’ve seen in the past 20 years, which is what makes it so tantalizing in the context of what we all know came after that.”
What can the market expect from credit card debt levels during the rest of the year?
“Credit card debt will increase by $140 billion from April through December, leaving us with a net increase of $80 billion for the year. Those are big numbers, but it could be a lot worse, had it not been for Q1’s strong economy,” answered Gonzalez. “Credit card debt levels may not rise quite as sharply as some people think given the near-record unemployment rate because credit card companies have tightened their underwriting considerably in the face of so much uncertainty regarding consumers’ ability to pay.”