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In the aftermath of the Great Recession, Americans have changed how they use credit cards. According to a new report by the credit bureau Experian, the average person has fewer cards and lower credit card debt than they did a year ago.

But some of those changes are backfiring, the report shows. As Americans reduce the number of cards they carry, they are charging more on the cards that remain in their wallets. That is causing many people to use more of their available credit, which could have a negative impact on their credit scores.

“By carrying over credit card balances and utilizing a significant portion of their available balance, they can potentially negatively affect their credit scores, which can in turn, hurt them when it comes to applying for other types of credit down the line including mortgages and car loans,” according to an Experian press release.

The credit bureau has published a list of the U.S. cities with the highest levels of credit card debt, as illustrated in this Credit.com slide show.

The average American had 1.93 credit cards in their wallet in December, a 23% drop since 2007, the study found. Each card had a balance of $4,283 on average, a 4% decline since 2007.

In many cases, getting rid of some credit cards means racking up higher balances on the cards that are left. The average American is using 30% of their available credit card balance, a 10% increase over the average credit utilization rate in 2010.

That can hurt people in the long run by damaging their credit scores, because lenders tend to view people who use a lot of their available credit as high-risk borrowers (hence the old conundrum that the people with the best credit are those who use it the least).

“Basically any utilization rate above 10% starts affecting your credit score,” says Gerri Detweiler, Credit.com’s personal finance expert. “It’s a reminder of why it’s important to keep your balances low.”

Experian also released a list of the cities with the highest average credit utilization rates. Though people in other cities may keep higher outstanding balances on their cards, the raw dollar amount doesn’t matter as much as the utilization rate when calculating somebody’s credit score.

The reason why is pretty obvious. If I ran up a $4,283 balance on my credit card, at the current average interest rate of 14.73% APR it would take me eight years of minimum monthly payments and $1,343 in interest charges to pay it off.

If Warren Buffet charged $4,283 on his credit card, he could call it “lunch.”  The effect on his credit score and his personal finances would be nil.

So here’s Experian’s list of the 15 U.S. cities with the highest credit card debt, sorted by their average utilization rates….

#1 Las Vegas, Nevada

Average credit utilization rate: 37.81%

Average credit card debt: $4,599

Las Vegas may not be the capital of Nevada, but in the wake of the Great Recession it certainly is the capital for bad economic news. The Sin City has the highest credit utilization rate of any American city, meaning that, on average, the city’s residents use a high percentage of credit available on their credit cards.  With an unemployment rate of almost 15%, and with 10.88% of the city’s homes in foreclosure, Las Vegas is hurting by almost any economic indicator.


#2 Miami, Florida

Average credit utilization rate: 37.57%

Average credit card debt: $4,555

People in Miami use 37.57% of the credit available on their credit cards. That means a person with a credit limit of $10,000 is carrying a balance of $3,757.00 every month. Anything above a 10% utilization rate is enough to hurt your credit, says Credit.com’s personal finance expert Gerri Detweiler. More than a quarter of Miami residents live in poverty, one of the highest poverty rates for any major American city.


#3 Jacksonville, Florida

Average credit utilization rate: 37.53%

Average credit card debt: $5,115

Though Jacksonville, Fla. is not as famous as Miami and Las Vegas for bearing the brunt of the Great Recession, its credit utilization rate is running a very close third. The city also has an unemployment rate of 11%, according to the Bureau of Labor Statistics, well above the national rate of 8.9% in December.

#4 San Antonio, Texas

Average credit utilization rate: 37.07%

Average credit card debt: $5,177

San Antonio rounds out the four American cities with credit utilization rates above 37%. The city beats the national average with an unemployment rate of 7.9%. But despite the city’s active tourism industry, which attracts over 11 million overnight visitors a year, almost 20% of San Antonio’s residents live in poverty.


#5 Norfolk, Virginia

Average credit utilization rate: 36.91%

Average credit card debt: $4,925

Norfolk, Va., is one of the few cities in the country where ocean shipping and travel remains essential to the local economy. Between its active commercial port, its thriving shipbuilding industry, and its sprawling Navy port, which is home to both the Atlantic and Second Fleets, Norfolk is doing comparatively well economically. Despite its high credit usage rate, unemployment in the city stands at 7%, well below the national average.


#6 Tallahassee, Florida

Average credit utilization rate: 36.88%

Average credit card debt: $4,605

Orlando and Miami are more famous for their foreclosure problems, but Florida’s capital has the second-highest credit utilization rate in the state. Meanwhile, lawmakers are meeting in Tallahassee to try and close the state’s $3.6 billion budget gap.

#7 Montgomery, Alabama

Average credit utilization rate: 35.84%

Average credit card debt: $4,532

Although Montgomery’s unemployment rate of 8.8% is on par with national levels, its poverty rate of 20.7% is well above the national level of 14.3%. About a quarter of Montgomery’s workforce is employed by local, state or federal governments, and the local economy is helped by nearby Maxwell Gunter Air Force Base.


#8 Savannah, Georgia

Average credit utilization rate: 35.68%

Average credit card debt: $4,570

Savannah is home to Gulfstream Aerospace, makers of private jets for the rich and famous, as well as Union Camp, which for years was the largest paper mill in the country. Today the city’s port is the fastest-growing in the nation. In December the city had an unemployment rate of 8.9%, matching the national rate exactly.


#9 Augusta, Georgia

Average credit utilization rate: 35.51%

Average credit card debt: $4,575

Home to the annual Masters golf tournament, and birthplace of funk god James Brown, Augusta, Georgia sits across the Savannah River from South Carolina. Downriver from the city, the Savannah River Site is a nuclear site operated by the U.S. Department of Energy that is one of the area’s largest employers and a recent recipient of $1 billion in federal bailout money to clean up the site and decommission two nuclear reactors. Despite the influx of 3,000 new jobs supported by the cleanup project, Augusta has an unemployment rate of 10.2%.


#10 Atlanta, Georgia

Average credit utilization rate: 34.98%

Average credit card debt: $4,960

The sprawling Atlanta metropolitan region is home to 5.5 million people, about 541,000 of whom live in the city itself. Of those, 22.4% live in poverty, and 10.2% are currently unemployed. Almost 99,000 homes of the area’s homes were foreclosed upon in the last 11 months of 2010, leading to a 20.6% decline in in the average appraised value of homes in surrounding Fulton County.


#11 Dallas, Texas

Average credit utilization rate: 34.19%

Average credit card debt: $4,936

In addition to the second-highest credit utilization rate among cities in Texas, Dallas has a poverty rate of 22.6%. Richard Fisher, chief of the Dallas branch of the Federal Reserve, raised eyebrows this week when he compared Congress to Lindsey Lohan for its “addiction” to debt and its “proclivity for shoplifting” from future generations.

#12 Phoenix, Arizona

Average credit utilization rate: 33.67%

Average credit card debt: $4,559

In many ways Phoenix has been the poster child of the housing bubble. In addition to a high credit utilization rate, the city has a poverty rate of 18.9%, and more than 7% of its homes in foreclosure. The state capital has also been at the center of political efforts in recent years to restrict undocumented immigration.

#13 San Diego, California

Average credit utilization rate: 33.36%

Average credit card debt: $4,673

San Diego is home to a sprawling network of U.S. Navy ports and Marines bases. Almost 14.5% of the city’s 1.3 million people live in poverty, and just over 10% are unemployed.


#14 Reno, Nevada

Average credit utilization rate: 33.08%

Average credit card debt: $4,575

Despite its many casinos, Reno has suffered many of the same economic difficulties as Las Vegas, its larger gambling neighbor to the south. The city has an unemployment rate of 11.3%, and 6% of its homes are in foreclosure. Reno is home to the Nevada State Fair, which is trying to raise private donations and struggling to survive after years of dwindling attendance and no support from the state government.


#15 Orlando, Florida

Average credit utilization rate: 32.73%

Average credit card debt: $4,525

Famously home to Disney World, as well as sports celebrities including Tiger Woods and Shaquille O’Neal, Orlando has diversified its economy in recent years, with investments in the area by military contractors and Darden Restaurants, one of the largest restaurant operators in the and owner of the Red Lobster and Olive Garden chains. Nevertheless, Orlando has an unemployment rate of 11.3%, and 16.7% of the city’s residents live in poverty.


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  • Bill Davis


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