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San Antonians charge up highest credit card utilization rate in the U.S.
San Antonio's credit card debt is the subject of yet another report, and it comes with a pretty big burden. A new study from CompareCards.com finds that Alamo City has the highest credit card utilization rate among the country's largest cities, at 35.1 percent and with the average credit card balance coming in at $5,477.
Credit card utilization rates — a credit card's balance compared to its spending limit — is "the second-most important factor in credit scoring formulas behind your payment history — how often you pay your bills on time — so it’s a big deal," the site notes. Financial experts generally recommend keeping spending to no more than 30 percent of a card's limit.
For the study, CompareCards.com compared user data from My LendingTree from September 2017 with data from September 2018. The same site found in November that credit card debt in San Antonio increased by 2.3 percent from 2017 to 2018. With housing costs on the rise across the state and country, San Antonio appears to be feeling the pinch.
We aren't alone, though. "For many of these cities, it’s all about income," the report says. "With a few exceptions, most of the cities with the highest utilization rates were among those with the lowest household incomes, while higher income cities tended to have lower rates."
One other Texas city comes in with a higher-than-recommended credit card utilization rate. Houston ranks fifth, with a 32.7 percent utilization rate and carrying an average balance of $5,587. Things are better in Austin, No. 32, with a 29.7 percent utilization rate and $5,878 average credit card balance, and Dallas-Fort Worth, at No. 33, where credit card holders are using 29.6 percent of their limit and carry a balance of $5,343.
Credit card holders in the San Francisco Bay Area have the lowest utilization rates in the U.S. San Francisco-Oakland ranks No. 49 at 26 percent, while San Jose ranks No. 50 with 23.8 percent.