This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

In a Bankrupt City, Detroiters Have Lowest Household Debt, While Dallas Has Most

NEW YORK (TheStreet) -- Detroit did fall into bankruptcy, burdened under the weight of operating costs, urban blight and vacating residents.

But the Motor City consumers who stayed show that when it comes to personal debt, they are the best at having low household debt.

Experian, the Costa Mesa, Calif., credit ratings company, has a Credit Trends study saying Detroiters have the least personal debt per household of 20 major U.S. cities, at $23,604; Dallas residents have the highest, at $28,240.

When the city began sliding into insolvency in recent years -- it entered officially into Chapter Nine bankruptcy in June with between $18 billion and $20 billion of debt -- residents took notice. Maybe it was because residents saw the slide that they slashed away at their mortgage, credit card, auto and student loan debt, cutting Detroit's personal debt level fell by 7.1% over the past four years, according to Experian.

Meanwhile, Dallas personal debt levels climbed by 7.8% over the same period and average U.S. debt rose at a moderately lower level, 5%. The average credit score in the U.S. has stayed at 665 since 2010, according to Experian, while the average national debt for U.S. adults stands at $25,927, slightly higher than the average debt of $24,678 four years ago.

It really does seem to be a tale of two cities between Detroit and Dallas, according to Michele Raneri, Experian's vice president of analytics. "Detroit, while being the only city to decrease its average debt, is showing signs of recovery amid the unemployment and economic pressures the city is experiencing," she says.

For Dallas and the other 18 cities that showed a rise in personal debt, the news isn't necessarily all bad.

"There is a lot more behind the numbers than meets the eye," Raneri says, noting that banks and lenders are finally loosening the purse strings after five years of tight credit conditions stemming from the Great Recession. That 19 of the cities had increases in debt amounts "could actually be signaling a recovery pattern as credit lending is opening up and consumers are becoming more confident."

Los Angeles and Miami residents fall into second and third place respectively on the Experian list; residents in those cities have managed to keep their personal debt amounts under $25,000.

Like its Texas counterpart, Houston is adding personal debt, finishing second in the U.S in highest household debt, at $28,105.

So let's call the Experian debt survey "good news" for Detroit and the U.S. economy as a whole, if for different reasons. Debt may be up across the country, but at least that means consumers are spending more, which raises gross domestic product.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs