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Boston 15th among US cities in debt survey

By Megan Woolhouse
Globe Staff / May 14, 2010

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Boston-area residents have plenty of debt, but slightly less than those in many other major US cities, according to a ranking released yesterday by the credit rating agency Experian.

Consumer debt in Boston ranked 15th out of 20 metropolitan areas, with each person owing an average of $24,670 in March.

Seattle topped the list with $26,646 in debt per consumer, and Dallas came in second, with $26,599.

Cities that fared better than Boston included Miami (number 19 at $24,334) and Los Angeles (number 20 at $24,009).

Being ranked 15th is not bad, but it’s no reason for celebration or a spending spree, according to Experian.

“On the face of it, Boston is doing quite well, though not as good as they could be doing,’’ said an Experian vice president, Maxine Sweet. “Average late payments are creeping up, and overall [credit] scores are slightly lower’’ than in 2007, she said.

To come up with its list, the agency took a statistical sampling of customers from its credit rating database in each metropolitan area, including thousands of people in the Boston region. Researchers then calculated averages based on a snapshot of what consumers owed on their credit card bills and installment loans in March. Debt totals included the full amount of purchases, such as cars, not the amount of monthly installment payments. Mortgage loans were not included.

Nationally, the debt average was $24,775 per person, or $1,890 higher than it was three years ago.

Researchers also found that consumers in the Boston area were using more of their credit than they did in 2007 — about 27 percent in March, compared with 23 percent three years ago.

The average credit score in Greater Boston has declined since 2007, from 784 to 780, though it was better than the US average, 749. Scores above 700 are considered very good.

Rising debt levels do not surprise Alliea Groupp, a volunteer at the Greater Boston Interfaith Organization, which has campaigned for banks to limit how much credit card interest they charge. Groupp said she racked up $20,000 in debt because of a medical emergency that was not fully covered by insurance. She said she knows people who are struggling to pay off debt because many banks raised credit card interest rates steeply, without warning, this year.

“Unfortunately, this does not surprise me,’’ Groupp said of the Experian research. “If a person loses their job or gets their hours cut, they still have to put food on the table.’’

Megan Woolhouse can be reached at mwoolhouse@globe.com.