How Long Would It Take Residents in Marin County vs. Imperial County to Pay Off $5,000 in Credit Card Debt?

I was reading the newspaper the other day and came across an article about people who face high medical debt, even with insurance. The part that caught my eye was this:

[Shields, 60, and her husband] have high incomes and insurance through Medicare, but have still taken on $5,000 in credit card debt. “We don’t go to the movies. We don’t go out for breakfast on Saturday morning. None of our pets are going to the vet this year for a checkup. I’m cutting back on Christmas presents this year because the money’s not there.”[1]

The couple’s income is high but apparently not high enough. Their credit card debt is presumably a side effect of high medical bills, not the primary cause of the financial distress and austerity measures.

What does $5,000 in debt look like?

No matter how they came to be in debt, I wondered what $5,000 in credit card debt might look like to consumers who reside in two counties in California: Marin County and Imperial County.

The same $5,000 may not sound like much to people in the wealthiest parts of the U.S., but it’s an albatross around the neck of someone in a place with low incomes, high unemployment and a lack of opportunities.

[Related: The State of America’s Credit Health — It’s Not Good News]

Let’s look at how long it might take people in these two counties to pay off their credit card debt, and the mitigating factors that might affect payoff.

Marin County, CA: 5 to 72 months to pay off $8,555

  • Median household income: $90,839[2]
  • Average income: $143,333[3]
  • Average debt per consumer: $178,809
  • Average credit score: 700
  • Average number of credit cards: 5.3
  • Average credit card balance: $8,555
  • Median home value: $955,600
  • Average rent price: $2,583[4]
  • Cost of living: 145.3% of national average
  • Unemployment: 3.3%

If you live in Marin County, CA, $5,000 might be the bill for your last family vacation. All of the numbers are higher here. Incomes, debt levels, home values and the overall cost of living are significantly above national averages. Does that make it easier to pay off $5,000 in credit card debt?

It depends. Let’s assume we have a hypothetical debtor who lives in this area, we’ll call her Sandra, falls right into the average numbers listed above. An income of $143,334 should net take-home pay of about $93,100 or $7,758 per month.

Sandra pays $2,583 in rent, plus we’ll assume a student loan payment of $340 per month and a car payment of $300 per month. That leaves more than $4,500 per month for utilities, food, entertainment and other expenses, including debt.

If she has a mortgage, the average balance in Marin County is $560,578. With 25 years to go at 4%, her payment is about $3,000 per month, still leaving more than $4,100 for other expenses. Paying $2,000 per month toward credit card debt is doable.

Even with a credit card balance of $8,555 (the average for Marin county), this debtor could be in the clear in as little as four to five months. If she supports a family, payoff at $1,000 per month will take nine months. If she makes just the minimum payment of about $175 per month, she’ll need almost six years to be debt-free (assuming a 12% APR).

Imperial County, CA: 9 to 66 months to pay off $4,144

  • Median household income: $41,807
  • Average income: $44,827 [5]
  • Average debt per consumer: $39,518
  • Average credit score: 614
  • Average number of credit cards: 4.3
  • Average credit card balance: $4,144
  • Median home value: $164,000
  • Median rent price: $639
  • Cost of living: 90.2% of national average
  • Unemployment: 21% [6]

If you live in Imperial County, CA, $5,000 in credit card debt could put you on the brink of bankruptcy.

In this county, our hypothetical debtor, we’ll call him Jim, earns $44,827, netting about $2,933 per month. He pays either $639 per month on rent or $910 on a mortgage ($172,500 at 4% with 25 years to go). Add a $200 student loan payment and a $300 car payment, and he’s left with between $1,500 and $1,800 for remaining expenses. Putting more than $500 per month toward the credit card debt would probably create a hardship.

Even with a credit card balance of just $4,144 (the average for Imperial County), Jim is likely to need at least nine months (assuming a 15% APR) to pay it off. At $200 per month, he can be debt free in 25 months. Making the minimum payment, around $100 per month, will keep this consumer in debt for five and a half years.

Mitigating factors


In Marin County, the unemployment rate is a healthy 3.3%. Our debtor isn’t likely to find herself unable to snag a job. Unfortunately, the same is not true in Imperial County, where the unemployment rate sits at 21%. There, a job loss could be catastrophic.


Imperial County also has a very low on-time post-secondary graduation rate (17% to 18% at the local community college). Only 13.3% of county residents hold a Bachelor’s degree or higher. This could mean that our debtor owes an average of more than $23,000 for a degree that was never completed, making future employment and earning potential much more limited.

Marin County, on the other hand, is home to the highest percentage of residents (54.6%) who are college graduates in the entire state of California. Its community college graduates more than 30% of its students on time.[7]

Emergency savings

In any county you’ll find consumers who don’t have an adequate emergency fund saved (about 28% of consumers nationwide, in fact[8]). That’s true at all income levels. But people at lower incomes, with less cash coming in, will have a much harder time recovering from any financial emergency that arises.

A $2,000 car repair isn’t likely to stop the life of someone bringing home $100,000 per year. But a $35,000 worker could find that he is unable to afford the repair. Losing the use of the car could mean losing the job, and the consequences cascade.

For more on California, see our story about The Salary You Need to Afford a Median-Priced Home in 20 California Cities.










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