20 Worst Cities to Live In When You’re Struggling to Pay Off Debt

by Elyssa Kirkham, StudentLoanHero.com, November 7, 2017

If you’re struggling to keep up with debt payments or pay extra to get rid of debt faster, where you live might be to blame. It can be harder to pay off debt when you live in a high-cost city because more of your income must be used to cover basic expenses.

Our new rankings of major U.S. cities reveal the 20 worst cities to live in if you’re trying to pay off debt.

In these cities, residents face some of the highest living costs in the nation. After paying for the basics, residents who live and work in these cities have less disposable income they can use to pay off debt or pay extra on loans or credit card balances.

See if your location made the list of the 20 worst cities to live in and get out of debt.

Identifying the worst cities to live in when you want to pay off debt

If your goal is to get out of debt as fast as possible, it takes some extra cash. On top of keeping up with minimum payments, you’ll need to pay extra on at least one account per month.

How much extra you can pay depends on your disposable income — or how much money you have left over after paying income taxes and covering basic living expenses. In our study, we wanted to find the cities where residents have the least disposable income to put toward their debt.

We surveyed the following data points for 159 major U.S. cities:

• Average annual wages
• The federal, payroll, state, and local income tax burden for that city and income level
• The cost of basic living expenses adjusted for the local cost of living

Based on those factors, we calculated the average annual disposable income of a single worker living in each city.

We also cited the following data points to help inform the rankings:

• The average VantageScore in each city, sourced from Experian in its 2016 State of Credit report. A higher average credit score shows that locals find it easier to stay current on their debt and repay responsibly.
• The local unemployment rates, reported by the Bureau of Labor Statistics. A low unemployment rate indicates a healthy jobs market and a high demand for workers.

Note that those two factors didn’t affect the city rankings but were included for illustrative purposes.

Here are the top 20 cities with the lowest disposable incomes for working residents.

20 worst cities to live in when you want to get out of debt….

3. Honolulu, Hawaii

• Average disposable income: $372
• Average annual wage: $51,080
• Average income tax burden: $12,901
• Cost of living is 86 percent above national average
• Unemployment rate: 2.3 percent
• Average credit score: 691

read … Full Report