A recent study by CreditCards.com looked at the average credit card debt burdens of 25 major metropolitan areas. The study compared each city’s average credit card debt with the area’s median income in order to calculate how long it would take a person there to pay off the balance.
The study then ranked the cities by the number of months it would take to pay off the debt. San Antonio, Texas was the worst on the list. The average credit card balance in that city is $4,880, and the study found that it would take residents there 16 months to pay off that debt.
On the flip side, San Francisco topped the list. The study found that residents in that city took the least amount of time, or nine months, to pay off their credit card balances. Although Washington, DC had the highest average credit card debt of $5,046, the study found that residents there could pay off the debt in ten months. These two cities had the highest median incomes, which helps to explain why residents there can pay off debt more quickly.
Although New Jersey did not make the list, it does not mean that New Jersey residents are not also struggling with credit card debt. The CreditCard.com study assumed that a typical resident could devote 15 percent of their earnings to paying down debt. For those of us with significant credit card debt, we may not be able to make more than the minimum payment.
If you have significant credit card debt, you should know that you have options. One option is to file for bankruptcy. Credit card debt is unsecured, which means that it can be discharged in bankruptcy. There are two main types of personal bankruptcy: Chapter 7 and Chapter 13. Under Chapter 7 bankruptcy, you can discharge all or part of your debt. Chapter 13 bankruptcy requires you to repay the debt through a three- to five-year payment plan.
Are you thinking about filing for bankruptcy? You may find it helpful to speak with an experienced attorney who can help you decide which type of bankruptcy is right for you.
Source: CreditCards.com, “Cities with the biggest, smallest credit card debt burdens,” Fred O. Williams, July 26, 2015