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If (When) the Next Fed Hike Comes, It’ll Cost Consumers 1.5 Billion

In the third quarter of this year, consumers racked up $16 billion in credit card debt, sending outstanding debt to an all-time record level for Q3 of any year, according to WalletHub’s Q3 2018 Credit Card Debt Study. If the Fed rolls out another rate hike, which is widely expected to happen on Dec. 19, credit card users will end up paying an extra $1.56 billion in interest. 

While the debt picture is worrisome nationwide, another WalletHub report, Cities with the Most & Least Credit Card Debt, shows that some geographic regions of the U.S. are in more dire straights than others. The study drew up on data from TransUnion, the Federal Reserve, the U.S. Census Bureau and WalletHub’s proprietary credit card payoff calculator to determine the cost and time required to repay the median credit card balance in more than 2,500 U.S. Cities. 

Cities with the Least-Sustainable Credit Card Debt

Colleyville, TX
Darien, CT
Park City, UT
Fairbanks, AK
Summit, NJ
Leawood, KS
The Woodlands, TX
Mill Valley, CA
Needham, MA
Sammamish, WA
Durango, CO
Lafayette, CO
Juneau, AK
Southlake, TX
Ridgewood, NJ
Hoboken, NJ
Westport, CT
Winchester, MA
Highland Park, IL
Bethesda, MD

Cities with the Most-Sustainable Credit Card Debt

  Carmel, IN
  Gainesville, TX
  Lake Forest, IL
  Bastrop, LA
  Allen, TX
  Madison, MS
  Coral Gables, FL
  Frankfort, KY
  Russellville, AR
  Southaven, MS
  Troy, AL
  Millsboro, DE
  Goshen, IN
  Jackson, MO
  Grand Junction, CO
  Tifton, GA
  Newton, NC
  Montrose, CO
  Gulf Breeze, FL
  Abingdon, VA

Key study takeaways were: 

  • Forest Park, Ga., has the lowest median credit card debt, at $917, 8.7 times lower than Darien, Conn., which has the highest median credit card debt ($7,935). 
  • Carmel, Ind., has the shortest debt payoff timeline, at 2 months and 1 day, 12.2 times shorter than Coffeyville, Texas, whose 24 months and 28 days timeline is the nation’s longest. 
  • WalletHub projects that the U.S. will end 2018 with $70 billion more in credit card debt than it started with. 
  • U.S. consumers began the year owing more than $1 trillion in credit card debt for the first time ever. 
  • The best balance transfer credit cards currently offer 0 percent APRs for the first 15-21 months with no annual fee and balance transfer fees as low as zero. Such deals likely will not be around for too much longer, WalletHub predicts. 

The video below provides a summary of the report: 

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