Urban Credit Cardholders Carry Higher Balances, While Rural Cardholders Are More Likely to Pay Late

Credit cardholders in urban areas tend to have higher card balances and credit limits than those in rural areas, according to a new LendingTree analysis. However, rural cardholders have higher delinquency rates.

More than 66 million Americans — 1 in 5 — live in rural areas, according to the U.S. Census Bureau. Much has been written about the differences between those living in urban and rural areas, especially as it relates to election-year politics. However, it isn’t breaking news that the splits between big-city dwellers and small-town residents can go beyond their preferred presidential candidate. This report dives into how these groups use their credit cards.

LendingTree gathered credit card data from more than 400,000 anonymized credit reports, then used U.S. Department of Agriculture (USDA) designations to determine which ZIP codes were rural and which were urban. From there, we analyzed how urban and rural dwellers compared in several key areas of managing credit cards, including balances, credit limits, delinquencies, applications and utilization.

Here’s what we found.

Key findings

• Urban-dwelling Americans have higher credit card balances and credit limits than rural residents. Cardholders in urban areas carry an average credit card balance of $8,085 — 28.7% higher than the average balance of $6,283 across rural cardholders in the third quarter of 2024. Additionally, urban cardholders benefit from higher credit limits, with an average of $41,902, compared with $30,835 for those in rural areas.
• Urban cardholders are more likely to carry a credit card balance and have maxed-out cards. 85.3% of cardholders in urban areas carry a balance, compared with 79.8% in rural areas. Additionally, 23.0% of urban cardholders have at least one maxed-out credit card, versus 19.5% of rural ones.
• City dwellers not only hold larger credit card balances but also carry more cards. They average 5.2 per person, versus rural residents’ 4.5. Additionally, 23.8% of urban cardholders have obtained a new credit card in the past six months, slightly higher than 22.6% of rural borrowers.
• Rural residents have lower credit card balances and limits but face higher delinquency rates and similar utilization rates. In the past year, their delinquency rate was 6.0%, compared with 5.5% for urban consumers. Meanwhile, credit card utilization stands at 30.0%, versus 29.8% for urban residents.
• Gen Xers have the highest average credit card balances in both urban and rural areas. In urban settings, their average credit card balance is $11,002, while it’s $8,447 in rural areas. Millennials have an average credit card balance that’s 31.3% higher in urban areas, at $6,938 versus $5,284.

Urban-dwelling Americans have higher card balances, limits than rural residents

It isn’t just the population that’s bigger in America’s largest cities. As this report makes clear, residents’ credit card balances are bigger, too — much bigger.

In the third quarter of 2024, cardholders in urban areas had an average card balance of $8,085. That’s 28.7% higher than the average balance for rural cardholders ($6,283). Those are concerning numbers, driven partly by urban cardholders also tending to have higher credit limits. The average for urban cardholders is $41,902, while rural residents have an average of $30,835.

Urban vs. rural: Credit card balances and credit limits

Source: LendingTree analysis of the anonymized credit reports of about 414,000 users on the LendingTree platform from July 1 through Sept. 30, 2024.

This debt disparity goes beyond cards. Urban borrowers owe an average of $147,365 across various loan types — mortgages, auto loans, student loans, credit cards, personal loans and other debts. Rural borrowers owe more than $42,000 less on average, with total debts of $105,166.

Urban vs. rural: Debt totals

Source: LendingTree analysis of the anonymized credit reports of about 414,000 users on the LendingTree platform from July 1 through Sept. 30, 2024.

There are myriad reasons for these discrepancies, but one is the massive income difference between rural and urban cardholders.

Government data shows average per-capita income for rural dwellers was just $49,895 in 2021, while urban dwellers earned $66,440 — 33.2% more than their rural counterparts.

While income levels aren’t included in credit scoring, they can play a major role in determining the size of the loan you can get once you’re approved. Also, they can play a huge role in determining people’s ability to pay off their debts.

Urban residents more likely to carry balances, have maxed-out cards

Higher credit limits can be a double-edged sword for cardholders. Used wisely, they can lower your utilization rate, which helps your credit score. They can also act as a de facto emergency fund, providing a little short-term wiggle room in tough times. However, they also enable you to run up bigger debts, which can wreak havoc on your financial situation for years.

Our analysis shows that urban cardholders are more likely than rural dwellers to find themselves in a precarious situation with their cards — namely, carrying a balance. In fact, 85.3% of urban cardholders carry a balance, while 79.8% in rural areas do the same.

Also, 23.0% of urban cardholders have at least one maxed-out credit card — meaning they’re using all their available credit — versus 19.5% of those in rural areas.

It isn’t just that they’re more likely to do these things, however. They also tend to have a few more credit cards overall — with urban cardholders averaging 5.2 and rural ones averaging 4.5 — and are more likely to have applied for one in the past six months. During that period, nearly 1 in 4 urban cardholders (23.8%) obtained a new credit card, slightly higher than the 22.6% of rural borrowers who did the same.

Urban vs. rural: Card ownership, acquisition and debt numbers

Source: LendingTree analysis of the anonymized credit reports of about 414,000 users on the LendingTree platform from July 1 through Sept. 30, 2024.

Rural residents have higher delinquency, similar utilization rates

Given all that, it appears that rural cardholders are doing a better job of handling their business with their credit cards, right?

Not so fast, my friend.

And, yes, rural dwellers have lower balances and are less likely to max out their credit cards, but their utilization rates are basically the same — 30.0% for rural cardholders and 29.8% for urban residents.

Urban vs. rural: Utilization and delinquency rates

Source: LendingTree analysis of the anonymized credit reports of about 414,000 users on the LendingTree platform from July 1 through Sept. 30, 2024.

I’d suggest that income plays a large role here as well. While the cost of living tends to be lower in rural areas, it doesn’t change the fact that higher incomes tend to make you more likely to be able to pay your bills on time and to have access to more credit.

Regardless of location, Gen Xers have highest average credit card balances

While the report shows many differences between urban and rural borrowers, some constants exist. One of the most notable is that Gen Xers ages 44 to 59 have the biggest card balances and Gen Zers ages 18 to 27 have the smallest in both areas.

In urban settings, Gen X cardholders’ average balance is $11,002, while Gen Z owed just $3,142 — less than a third of Xers’ total. In rural areas, Xers averaged $8,447, more than three times the $2,272 owed by Gen Z.

Urban vs. rural: Credit card balances by generation

Source: LendingTree analysis of the anonymized credit reports of about 414,000 users on the LendingTree platform from July 1 through Sept. 30, 2024.

Even with the lowest balances, Gen Zers still had the greatest percentage difference between urban and rural cardholder balances. Urban Gen Z cardholders owed 38.3% more than their rural counterparts. Meanwhile, millennials had a gap in balances of 31.3%, with urban residents owing $6,938, compared with $5,284 in rural areas.

5 tips for smart credit card usage

No matter where you live, the keys to good credit card usage don’t change.

Job No. 1 for anyone with a credit card is to pay off your balance as soon as possible. That’s true whether you live in Manhattan, N.Y., or Manhattan, Kan., or anywhere in between. Ideally, you’d pay your bill in full at the end of every month, but life is expensive in 2024 — and probably isn’t going to be less so in 2025 — so that’s not always possible. It should always be the ultimate goal, however.

Here are some other tips for using your credit card wisely.

• Pay on time every single time. Whether you pay in full or just pay the minimum, make certain that you pay your bill on time every single time. A single payment made 30 days or more late can wreak havoc on your credit score, possibly costing you 50 or more points. Remember that very little in life is more expensive than crummy credit, so protect yours by consistently paying your bills on time.
• Don’t apply for too much credit too often. Every time you apply for a new credit card, your credit score takes a small, temporary ding. It’s no big deal if you only apply every once in a while — say, a time or two per year. However, applying for a card too often can have a bigger impact. It can also make you look desperate in the eyes of lenders reviewing your credit report. Plus, more credit cards mean more payments to track and more opportunities for error. Proceed with caution.
• Don’t overspend while chasing credit card rewards. Yes, we all love cash back. We also love big points and miles bonuses that can get us free hotel nights and airfares. However, if you carry a balance regularly, your focus should be on paying that down, not pursuing the newest rewards card. With the average new credit card interest rate at 24.61% at the time of writing, any rewards you earn will likely be outweighed by interest if you carry a balance.
• Lower your interest rate if possible. Today’s sky-high interest rates can be a killer for folks with card debt and make it tough to pay down debt. However, consolidating debts with a 0% balance transfer credit card or a personal loan can help you get those rates a bit more under control. You can even consider calling to ask your card issuer to lower your interest rate. It works way more often than you’d imagine.
• If you’re in trouble, don’t wait to get help. Rough patches happen. The sooner you address them when they do, the better off you’ll be. For example, if you lose your job or have a medical emergency and you know you’re going to struggle to pay your bills for a while, inform your lender as soon as possible. Lenders often have so-called hardship programs to help people through short-term rough spots — offering things like temporarily lower interest rates, deferred or reduced payments, higher credit limits and more. However, you typically have to ask for the help, so don’t wait.

Methodology

LendingTree researchers analyzed a sample of about 414,000 anonymized credit reports of LendingTree users from July, August and September 2024 — the third quarter of 2024 — to determine the average credit card balances, credit card limits and utilization ratios — among other things — for urban and rural cardholders.

Researchers used USDA Economic Research Service rural-urban commuting area (RUCA) codes to identify urban and rural ZIP codes. Areas with RUCA codes 1 through 3 were defined as urban, while those with codes 4 through 10 were classified as rural.

We defined generations as the following ages in 2024:

• Generation Z: Born after 1996; ages 18 to 27
• Millennial: Born between 1981 and 1996; ages 28 to 43
• Generation X: Born between 1965 and 1980; ages 44 to 59
• Baby boomer: Born between 1946 and 1964; ages 60 to 78