Houston, Atlanta Top List Of Most Financially Distressed Cities…

NEW YORK — As Americans grapple with rising costs and economic uncertainty, a troubling pattern of financial distress is emerging across the nation’s largest cities. A new WalletHub study reveals that millions of urban residents are struggling to keep up with their bills, with some cities seeing nearly 90% jumps in the number of people seeking payment relief from their creditors. Who’s got the worst? Southern cities are hit particularly hard, with Houston, Atlanta, and Jacksonville leading a concerning list of metros where residents are increasingly falling behind.

The analysis, which examined 100 major cities using nine key metrics, paints a concerning picture of growing financial instability even as the broader economy shows signs of improvement.

Financial distress, in this context, refers to credit accounts in forbearance or with deferred payments — situations where lenders have granted account holders temporary relief from making payments due to financial hardship. This measure provides a crucial window into household financial health beyond traditional economic indicators.

Houston Leads Nation in Financial Struggles

Houston claims the dubious distinction of being the most financially distressed city in America, with a total score of 76.44 out of 100. The Texas metropolis shows particularly troubling indicators, with over 9% of its population having accounts in distress. The city’s residents are increasingly turning to desperate measures for financial relief, as evidenced by their high Google search volume for terms like “debt” and “loans,” suggesting a growing need for borrowing options.

Close behind Houston is Atlanta, scoring 76.24 on the financial distress scale. The Georgia capital experienced a dramatic 36% increase in residents with accounts in distress between the fourth quarters of 2023 and 2024. Atlanta residents also showed the sixth-highest number of accounts in distress per person, indicating that those struggling often face multiple financial challenges simultaneously. Like Houston, Atlanta’s residents are actively searching online for debt-related solutions, highlighting the widespread nature of financial hardship in the city.

Jacksonville, Florida, ranks third overall with a score of 67.94, but leads the nation in several concerning metrics. The city reports the highest percentage of residents with accounts in distress at nearly 16%, alongside the highest number of distressed accounts per person. Most alarming is Jacksonville’s 87% increase in the share of people with accounts in distress between Q4 2023 and Q4 2024, the largest such increase among all cities studied.

The study reveals a clear regional pattern of financial distress concentrated in the Southern United States. Dallas ranks fourth with a score of 67.79, showing particularly troubling trends in bankruptcy filings. Charlotte, North Carolina, takes the fifth spot with a score of 66.65, despite maintaining relatively strong credit scores compared to other top-ranked cities.

Orlando (sixth), San Antonio (seventh), and Tampa (eighth) round out the Southern cities in the top ten, each showing distinct patterns of financial strain. Orlando and Tampa share Jacksonville’s high percentage of residents with accounts in distress, while San Antonio stands out for its concerning increase in bankruptcy filings.

Miami and Austin complete the top ten, with scores of 61.91 and 61.42 respectively. Miami’s situation is particularly noteworthy, as it combines poor credit scores (ranking 98th out of 100) with high rates of financial distress. Austin, while faring better in terms of credit scores, shows troubling trends in bankruptcy filings similar to other Texas cities.

“Getting out of the downward spiral of financial distress is no easy feat. You may get temporary relief from your lenders by not having to make payments, but all the while interest will keep building up, making the debt even harder to pay off,” says WalletHub analyst Chip Lupo, in a statement. “People who find themselves in financial distress should budget carefully, cut non-essential expenses, and pursue strategies like debt consolidation or debt management to get their situation under control.”

Cities Showing Resilience

At the other end of the spectrum, several cities demonstrate stronger financial health. Anchorage, Alaska, shows the lowest level of financial distress with a score of 12.38, benefiting from lower bankruptcy rates and fewer accounts in distress. Fort Wayne, Indiana, and Scottsdale, Arizona, also perform well, with scores of 21.73 and 22.15 respectively.

Irvine, California, and Raleigh, North Carolina, stand out for maintaining the highest credit scores among all cities studied, suggesting that their residents have generally maintained better financial habits despite broader economic challenges.

The study found significant variations in credit scores across cities, with implications for residents’ financial options. While some cities maintained strong credit profiles despite other signs of distress, others showed concerning declines. The change in credit scores between Q4 2023 and Q4 2024 provides particular insight into which cities are experiencing worsening financial conditions.

The data presents a mixed picture of financial health across American cities. While some regions show signs of resilience, the concentration of distress in major Southern metropolitan areas suggests broader structural challenges that may require targeted intervention and support.

Full List (Hover mouse over your city to see ranking)