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Credit Card Spending Trends: A Nationwide Analysis

According to Experian data, credit card spending has surged over the past year. By the end of June 2023, the average credit card balance across the nation rose to $6,365, marking an 11.7% increase from $5,699 in June 2022.

Every metro area in the U.S. experienced a rise in average balances since June 2022, with some cities seeing much higher increases than the national average. This analysis focuses on these outlier metros, both at the high and low ends of the spectrum, among the nearly 400 metropolitan statistical areas tracked by Experian.

Significant Increases in Credit Card Balances Along the West Coast

The most substantial increases—where average credit card balances grew by 15.4% or more in the past year—occurred in 25 metros, predominantly located in the Western U.S. Many of these cities are in California, forming a belt of rapidly growing balances from El Centro near the southern border, through the Central Valley to Fresno, Modesto, and Stockton, and extending north to cities in Oregon and Washington, reaching up to the Canadian border.

Metro Areas with the Highest Percentage Increases in Credit Card Balances

While not all cities on this list are large metros—Bend, Oregon, for example, had a population of just over 200,000 in 2022—it also includes major cities like Las Vegas, Phoenix, and Portland, Oregon.

Modest Growth in Credit Card Balances in Certain Metros

Conversely, some cities saw only modest increases in balances, all under 8% since mid-2022. These metros are generally smaller cities scattered throughout the Midwest and the South.

Lowest Percentage Increases in Credit Card Balances

Among these 25 metros, average credit card balance growth ranged from a modest 4.9% increase in Casper, Wyoming, to a relatively low 8% in Blacksburg, Virginia.

Understanding the Balance of East and West

What’s driving the increases in the Western U.S.? It’s likely due to inflation affecting big-ticket items. While costs such as rent, vehicle purchases, and insurance premiums have impacted most U.S. consumers, these expenses are even more pronounced in California, which is facing a perfect storm of household expense hikes.

Challenges Californians are experiencing include some home and auto insurers no longer writing policies or sharply increasing premiums, smaller cities seeing an influx of new residents from more expensive metros like Los Angeles and San Francisco, and recent tech sector layoffs disrupting income flows. These factors could lead consumers to rely more on credit cards.

Fortunately, Experian data shows that consumers are bending rather than breaking. Only five of these 25 metros saw a decline in their average FICO® Scores over the past year, and even then, it was only a one-point loss. More broadly, average credit utilization has increased by just 1 percentage point over the past year, from 27% to 28%—a manageable rise.

For any mortgage-related needs, feel free to call O1ne Mortgage at 213-732-3074. Our team is ready to assist you with confidence and expertise.

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