Credit card debt will likely increase by around $60 billion during 2021, even after a $56.5 billion first-quarter paydown in 2021.
“People trying to get rid of credit card debt should consider both the spending and repayment sides of the equation,” said Jill Gonzalez, an analyst for WalletHub, a personal-finance website.
“Making a budget that cuts out unnecessary luxuries and maximizes monthly debt payments will be a big help, as will taking steps to boost your income,” Gonzalez said. “The next step is to focus your attention on your most expensive debt, as paying that off first will save you the most money in the long run.”
In 2020, American consumers paid off record-setting amounts of credit card debt. In the first quarter of 2021, consumers continued the trend paying off $56.5 billion in these debts.
However, some areas of the country have bigger payment problems than others. WalletHub compared more than 180 large cities based on how much residents owe to credit card companies and how those balances changed in the first quarter
| Cities with the biggest debt paydown | Cities with the smallest debt paydown |
| Santa Clarita, California | Fargo, North Dakota |
| New York, New York | Buffalo, New York |
| Chesapeake, Virginia | Akron, Ohio |
| Chula Vista, California | Cedar Rapids, Iowa |
| Pembroke Pines, Florida | Milwaukee, Wisconsin |
| Pearl City, Hawaii | Toledo, Ohio |
| Santa Ana, California | Cleveland, Ohio |
| Virginia Beach, Virginia | Lewiston, Maine |
| Rancho Cucamonga, California | Madison, Wisconsin |
| Plano, Texas | Detroit, Michigan |
“Credit Card Debt Study,” a Wallet Hub study, found the following:
- Continued debt reduction. In 2020, there was a record paydown of $82.1 billion.
- Bigger paydown than normal. Consumers’ first quarter 2021 credit card debt paydown was 51 percent larger than the post-Great Recession average for a first quarter.
- Rising charge-offs. At 2.95 percent for the first quarter of 2021, the credit card charge-off rate is up by 14.3 percent compared to last quarter.
Not surprising that some of the highest debt is in California. LOL
Actually, California is on the list with the biggest debt paydown. However, maybe California had big debts to that’s why those cities had a big debt paydown.
Credit card debt can feel so overwhelming.
Yes, I had it for years. However, when I paid off my house, I was able to pay off all my credit card debts and am not accumulating any more. It’s a good feeling.