South Florida more in debt than rest of nation

MIAMI, Fla. -- Many of those living in the Miami- Fort Lauderdale area are heavily in debt, concludes a new survey.

South Floridians owe -- a lot -- on car, home and student loans. The average South Florida mortgage balance is more than $30,000 higher, for example, than the average U.S. home loan balance, according to a report released by Credit Karma, a consumer website.

One reason is that South Florida has a higher cost of living than some other parts of the country, said Kenneth Lin, CEO of Credit Karma. Many South Floridians also bought homes a few years ago when prices were inflated during the housing boom, said Lin. Some are now stuck with high mortgage balances, he said.

The average South Florida balance on home loans is just under $200,000 or 19 percent more than the national average of $166,990, according to Credit Karma.

The website also found that many South Floridians have taken out a large amount of student loans. The average student debt balance in South Florida is at $32,330 or 11 percent more than the $29,092 national average, Credit Karma reported.

Even the money owed on car loans in Miami-Fort Lauderdale tend to be higher than the national average: $16,411 vs. $15,986.

However, there is a bright spot: South Floridians continue to pay down their credit card debt with the average balance down 14 percent or $775 less than a year ago, according to a survey.

In fact, the average South Florida balance on credit cards is more than $700 less than the $5,403 national credit card average.

That may be because some South Florida consumers have had their credit cards yanked because they were foreclosed on, filed for bankruptcy or just had trouble paying bills after being laid off during the Great Recession, said Howard Dvorkin, founder of the Fort Lauderdale-based Consolidated Credit Counseling Services. His agency is now helping many recover from borrowing more than they could afford to pay back.

Some debt can be good if it helps people get better jobs, pay raises or allows them to build home equity, he said.

"It's bad if they are borrowing to live a lifestyle they can't afford," said Dvorkin.

Credit cards are a temptation and Dvorkin said he was glad that South Floridians have worked to reduce their balances.

"This is simply the worst debt you can have," agreed Daniel Tobias of Davie who, along with his wife, Jillian, makes it a point to pay off balances every month. The couple set up a free website, DoughHound.com, to help people keep track of their spending.

But Tobias said the couple have taken out other loans to help improve their lives. It helps that low — even zero-percent interest rates — have made buying necessary items more affordable.

The couple managed to get a zero-percent interest loan for their Toyota compact SUV, he said.

They're now have 2 percent interest on their college loans because they paid for three years without missing a payment, Daniel Tobias said. The student loans helped them get good jobs, he added.

Their 15-year mortgage is only 3.5 percent, he added.


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