5 Cities Warming Up to Credit Card Debt
The financial lessons taught by the Great Recession might be fading into the background. A new report reveals that consumers across the country are feeling more comfortable with credit card debt, while lenders are increasingly turning to subprime borrowers for new business.
Living for today by borrowing from tomorrow is making a comeback in the most populated regions. The nation’s twenty-five largest metropolitan areas all increased credit card debt in the second quarter compared to a year earlier, according to Equifax. During the same period last year, seven of the top twenty-five metro areas experienced declines in credit card debt. Total credit card debt in America rose from $586.8 billion in the second quarter of 2013 to $604 billion in the most recent quarter.
While a rise in credit usage is typically seen as a positive sign that consumers are feeling optimistic about the future, less credit-worthy customers are playing a larger role. One out of every three new cards is issued to an individual with a subprime score, compared to one in four immediately following the recession. Subprime borrowers also raised their total credit card debt by 5.5 percent over the past year, easily above the national trend of only 2.9 percent. A credit score below 660 is generally considered to be subprime.
Consumers in areas hardest hit by the recession posted some of the biggest gains in credit card debt. Let’s take a look at the largest 5 cities warming up to credit cards.