Southern California cities top credit card debt list in new study

Several Southern California cities have the most credit card debt per household in the U.S., a new WalletHub study found.

Santa Clarita ranked first out of 181 U.S. cities, with a household average of about $22,753 in credit card debt, and a total of about $1.7 billion in debt for its 228,000 residents, according to data taken from the U.S. Census Bureau and TransUnion, WalletHub said.

Chula Vista was second, with an average of $20,567 in credit card debt per household, and a total of $1.8 billion among its 275,000 residents.

But being high on the list doesn’t mean that debt is overwhelming the population, Chip Lupo, a WalletHub writer and The Times on Monday.

In areas like Santa Clarita, the fast-growing suburban community in northern Los Angeles County, where the median household income is $118,489 according to census data — higher than in other parts of the U.S. — it’s actually a sign of good credit management, he said.

“It reflects a greater financial flexibility rather than any type of financial distress,” Lupo said. “As long as interest rates are lower, borrowing costs are managed and as long as you’re paying back the debt.”

Other cities rounding out the top 10 in Southern California are No. 4 Fontana, No. 5 Riverside, No. 7 Rancho Cucamonga and No. 10 Glendale.

Some households may factor credit card debt and interest into their monthly budget, he said.

“The key, as we’ve mentioned, is just to not get to a point to where it becomes so overwhelming that it starts affecting your other debt” like car loans or mortgages, Lupo said. “Usually when you get yourself in over your head, credit card debt is usually the first thing that gets tossed by the wayside.”

These places in Southern California generally ranked lower on WalletHub’s other rankings for financial distress and debt delinquency, the new study noted.

Residents in these areas likely have multiple credit cards, Lupo said, signaling that they might be taking advantage of low introductory rates on new cards more often. Santa Clarita also ranked second as the city with the most credit cards per household, with Chula Vista ranking 39th.

Credit card debt usually starts with poor financial literacy and a misunderstanding of how interest works, Lubo said. Coupled with inflation, credit cards are sometimes used to keep households afloat despite debt piling up, he said.

“When you are piling on gas and groceries and trips to the laundromat, all your everyday expenses are going to these credit cards, you’re running up this debt at an average interest rate of about 22, 23%,” especially in places where the median household incomes are low.

Other cities high on the list, like New York City, have a much higher population and more people in financial distress because of a lower median income, the study notes.

Americans have accrued more than $1.35 trillion in credit card debt as of the end of 2024, and credit card defaults have hit the highest level in 14 years, jumping to a record $46 billion from January to September 2024.