Equifax: Total Consumer Debt Increases Across the Metro Markets

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Sunday, 30 March 2014 23:10

A strengthening economy, a housing recovery and greater consumer confidence may explain an uptick in overall debt accrual. According to new Equifax National Consumer Credit Trends Report data, total consumer debt grew in each of the 25 largest metro areas at the end of 2013, except for Miami (-3.3 percent), Las Vegas (-2.0 percent), Orlando (-0.5 percent), and Tampa (-0.4 percent). While non-mortgage debt grew in those areas, the declines were due to the continuing recovery of the real estate market. Houston experienced the highest growth in total consumer debt of 5.9 percent as of the close of the fourth quarter, compared with the same period of 2012. Houston, Denver and Dallas had the highest overall gains, led by mortgage growth.

The Miami area had the sharpest drop in overall debt due to an increasing number of homes coming out of foreclosure and the high rate of cash sales in the area, thereby decreasing the overall debt volume.

In many areas of the country, consumers are optimistic about an economic recovery. For example, the rate of growth of automotive balances has increased in each of the top 25 metro areas year-over-year, except for Pittsburgh. All 25 markets except for Detroit showed a growth in auto balances of more than 6 percent.

"Consumers overall are feeling more comfortable about the economy and their own financial prospects, so they're willing to take on debt for the right reasons," said Trey Loughran, president of Equifax Personal Solutions. "But in areas where the economy still lags, consumers are being more cautious and financially prudent."

Credit card debt is also growing across the board as all of the top 25 metro markets accrued more debt for holiday gifts this past season than in the year before and increased their rate of credit card balance growth. In Houston, credit card debt rose 4.5 percent in January, compared with the same period the prior year. Dallas saw a 3.5 percent increase in credit card debt, while Miami saw a 3.2 percent increase, followed by Las Vegas, up 2.9 percent. Metro markets showing a large decline in mortgage growth - Miami, Tampa, Orlando and Las Vegas -- also showed an increase in credit card spending, which suggests the healing process is underway.

"People are starting to see a turnaround in the economy and are making reasonable borrowing and spending decisions again," said Loughran.

Headquartered in Atlanta, Equifax operates or has investments in 18 countries and is a member of Standard & Poor's (S&P) 500® Index.  Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. In 2013, Equifax was named a Bloomberg BusinessWeek Top 50 company, was #3 in Fortune's Most Admired list in its category, and was named to InfoWeek 500 as well as the FinTech 100.

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ATLANTA TREND™

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