Why are the debts of New Yorkers largest and hopeless among Americans

New York City may officially be America's most financially troubled city—and here's why, according to local debt consultants and financial analysts.

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The rate of delinquent credit card debt and bad personal debt among residents here is the highest in the country. In the third quarter of 2018, household debt and credit rose $219 billion, or 1,6% more, to $13,51 trillion. This is a record $837 billion more than the previous peak in 2008, writes New York Post.

With the progressive collapse of personal finances and a wider financial crisis, an unprecedented number of local residents is on the verge of a financial catastrophe.

Experts say that the latest surge in abnormal debt has created a huge hole in the personal finances of New Yorkers. Forty percent of Americans recently said they could not pay for an emergency requiring 400 dollars. In New York, the proportion of such people may be even higher, analysts say.

“It's really bad right now,” said Kelly Figueroa, a consumer debt consultant with the national nonprofit GreenPath in New York.

“Like the rest of the nation, most New Yorkers live paycheck to paycheck,” she added. “But in New York the situation is even worse due to the higher and rising cost of living in the city.”

According to Kelly, New York City's unsecured problem debt ranges on average from 20 000 dollars to 100 000 dollars per person.

Problems with credit card debt in New York have jumped: from 30% to 40% of the GreenPath client load over the past few years, even though there have been less stressful mortgage situations caused by the financial crisis.

New York City is currently the No. 1 metropolitan area in the United States, followed by Atlanta and Los Angeles. They are home to a huge number of problem consumers who turn to consultants for help.

“New York City has the second most expensive housing market in the United States; rents are rising along with interest rates, credit card debt and other debt, including auto loans, says Thomas Nitzsche, a consumer debt expert at the nonprofit Money Management International.

According to analysts, the fact that a large part of the population of New York receives wages far in excess of the national average, as well as a low level of unemployment can lead people to reassess their abilities and encourage them to take large debts and leave large credit card debts .

Since 2010, rents in New York City overall have jumped 31%—and even 45% in some neighborhoods, according to the StreetEasy Rent Index. That could explain why many urban consumers are drowning in debt, analysts say.

A study by the Fed in New York shows that even by 2016, the average credit card balance in Manhattan alone reached 7400 dollars compared to 5400 dollars in the rest of the country. Credit card delinquencies with a 90 daytime payout window reached a staggering 15,1% for the Bronx and nearly 10% for the entire city, compared to 8,3% for the whole country. Analysts believe that since then these numbers have increased even more noticeably.

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