There are more people in "distressed" debt in Houston than in any other city in the United States, according to a new report, and it's likely because of people living off their credit cards.
WalletHub did a deep analysis of the 100 largest cities, looking closely at residents' average credit scores, along with changes in bankruptcy filings between December 2023 and December 2024, and the share of people with accounts in distress, with Houston making the top of the list.
But Texas as a whole doesn't fare well in the report: Go here to check out the top-10 list of cities with distressed debt and you'll find Dallas at number 4, San Antonio at number 7, and Austin at number 10.
"People do find themselves in financial distress nationwide, which we define as having any type of a credit account in forbearance or in deferred payments, which means that the account holder is granted temporary relief from making payments due to a documented and provable financial hardship," says Chip Lupo, a writer and analyst at WalletHub.
As part of the analysis, the company looked at a huge number of credit accounts, because when people have one account in distress they likely have more than one account (car, mortgage, loan) in distress also.
"And analytically a high interest in debt- and loan-related searches, in other words, the number of people searching online terms such as 'debt relief,' 'high interest,' or loan-related searches," Lupo added.
WalletHub also looked closely at what Lupo calls financial literacy, and they found a number of people using their credit cards "not fully knowing what is involved there, namely a 22-to-23-percent average interest rate."
But the remedies for those using credit cards for everyday use is that the remedies can possibly make things worse financially.
The credit card companies "all have them, they don't advertise them so you have to reach out to the companies if you're in any type of trouble, but yes, you're not making any payments for six months, nine months, twelve, whatever the terms are -- but the interest still accrues.
"So at the end of that term, when you return to your payments, you're going to be paying a lot more because all that interest is going to be piled onto that higher balance."