FE

Introduction

Access to consumer credit yields benefi ts for American families, from providing liquidity to 

cover household expenses to establishing a solid credit history and facilitating major asset 

purchases from higher education to home ownership. But too much access or overextension 

of credit can adversely affect credit scores, hampering people’s ability to obtain basic needs, 

including stable housing and employment, or increasing the costs of goods and services, such 

as cell phone plans. Access to credit opportunities has increased dramatically in recent decades 

and with it excessive consumer debt. According to the Survey of Consumer Finances, in 

2007, 73 percent of American families held credit cards, 60 percent carried a balance, and 

the average amount of debt was $7,300, compared to an average of $2,300 in 1992.i In New 

York, many families rely on credit to bridge everyday cost-of-living expenses, unexpected job 

losses, and other fi nancial obligations. From 2007 to 2008, average New York households’ 

credit card and loan bills increased by 18 percent.ii Excessive debt severely impedes a family’s 

overall household stability. 

Research on the consumer credit market, particularly focused on individuals and families 

with low incomes, informs fi nancial empowerment and asset-building efforts to ensure that 

programs and policies remain dynamic and relevant to the needs of consumers. To this end, 

the New York City Department of Consumer Affairs Offi ce of Financial Empowerment (OFE) 

has released two studies that contribute to the understanding of banking services, access 

to credit, and debt burdens on New Yorkers. In 2008, OFE released a Neighborhood Financial 

Services Study, which examined the availability and usage of fi nancial services and products 

in two neighborhoods—Jamaica, Queens and the Melrose section of the Bronx. In an effort to 

expand on the results of the Study and explore a more complete picture of fi nancial stability 

of consumer fi nances in the City, OFE commissioned the Citywide Financial Services Study. 

Citywide Financial Services Study Research Methodology

OFE commissioned Social Compact, a leading nonprofi t research fi rm, and Axciom, a global 

marketing services company, to provide analytical estimates of banking patterns, debt levels, 

and indicators of fi nancial stability across New York City. Data sources used in the study derive from various public and private data sets, including InfoBase-X data, the largest collection 

of U.S. consumer data available in one source, allowing for estimates at the local level. 

This Brief summarizes fi ndings in three key indicator categories: access to credit, debt levels 

and credit card use, and fi nancial distress. Access to credit is measured by the percent of 

households which have at least one credit card, the number of credit cards held, and the 

credit limit granted on new credit lines. Debt levels are measured by the percent of overall 

credit being used and outstanding balances on credit cards. Financial distress is measured 

by how much disposable income is available to families. This data complements banking 

data that OFE released in February 2010. Because New York City’s unbanked households are 

highly concentrated in certain neighborhoods, this summary of fi ndings focuses on these lowand moderate-income neighborhoods.iii

more...

825,000

NYC adults with no

bank account

$4,000

or more in credit 

card debt held by 

59% of households 

in low-income NYC 

communities

46%

of NYC households 

have 3 or more

credit cards

48%

of NYC households 

have $0

in discretionary 

income

Source: 2010 Citywide 

Financial Services Study

FINANCIAL

EMPOWERMENT FEBRUARY 2011

BRIEF
Findings

Finding #1: Households in low-income neighborhoods are more likely to hold a credit card than a bank account.

OFE examined access to credit across New York City neighborhoods by analyzing households that held at least 

one bank-issued credit card. Overall, New Yorkers are less likely than people in the rest of the country to hold 

a credit card. In 2009, just over two-thirds (68 percent) of New York City households had a credit card, compared to more than three-quarters (76 percent) nationwide. However, there is considerable variation across City 

neighborhoods. Residents of higher-income neighborhoods, such as Staten Island and Midtown Manhattan, are 

more likely to hold a credit card than residents of lower-income neighborhoods, such as Bushwick and BedfordStuyvesant in Brooklyn. New Yorkers who do access credit are also much more likely to have multiple credit card 

lines (three or more) compared to households nationally (46 percent versus 34 percent).

While residents of lower-income neighborhoods have less access to consumer credit (in the form of credit cards) 

than the City and nation as a whole, they are more likely to hold a credit card than have a relationship with a 

mainstream fi nancial institution. In nine of the 10 lowest-income neighborhoods, households are more likely to 

go without a bank account than a credit card (see Chart 1). In some neighborhoods, such as Morris Heights and 

Highbridge in the Bronx, there is as high as a 14 percentage point difference between the presence of credit 

cards and that of bank accounts. 

February 2011 NYC Department of Consumer Affairs Offi ce of Financial Empowerment

FE BRIEF

% of Households with No Bank Acount % of Households with No Credit Card

60%

50%

40%

30%

20%

10%

0%

BX2 BX1 BX6 BX3 BX5 BK16 BX4 MN10 MN11 BK3

Neighborhood Legend

 BX1= Bronx Community District 1 (Mott Haven, Melrose, Port Morris)

 BX2 = Bronx Community District 2 (Hunts Point, Longwood)

 BX3 = Bronx Community District 3 (Melrose, Morrisania, Claremont, Crotona Park East)

 BX4 = Bronx Community District 4 (Highbridge, Concourse)

 BX5 = Bronx Community District 5 (Morris Heights, University Heights, Fordham, Mount Hope)

 BX6 = Bronx Community District 6 (East Tremont, Bathgate, Belmont, West Farms)

 BK3 = Brooklyn Community District 3 (Bedford Stuyvesant, Tompkins Park North)

 BK16 = Brooklyn Community District 16 (Ocean Hill, Brownsville)

 MN10 = Manhattan Community District 10 (Central Harlem)

 MN11 = Manhattan Community District 11 (East Harlem)

Chart 1. 10 Lowest-Income NYC Neighborhoods: Banking and Credit Card Access

Finding #2: Households in low-income neighborhoods have higher credit card utilization rates than households 

in high-income neighborhoods. 

Consumers’ credit card utilization rates are indicators of how well people are managing credit. If households are 

using more than 30 percent of the credit available to them, lenders perceive them as higher risk. High utilization of 

credit also has a signifi cant negative impact on credit scores, with as much as 30 percent of a consumer’s credit 

score depending on the utilization rate. 
Although New York City residents as a whole 

are less likely than the rest of the country to use 

more than 30 percent of their available credit 

(36 percent compared to 43 percent), Bronx 

residents have alarmingly high utilization rates, 

indicating real fi nancial distress (see Chart 

2). Two-thirds of Bronx households are using 

more than 30 percent of the credit available to 

them, and in some neighborhoods more than 

80 percent of the households are using over 30 

percent. Further, we found a positive relationship between lacking a bank account and having 

high credit card utilization rates. In 18 of the top 

20 unbanked neighborhoods, residents have the 

highest credit card utilization rates in the City. 

While we are unable to attribute these high 

utilization rates to the absence of a bank 

account, the implications are profound. Such 

high utilization rates can negatively impact credit 

scores and make future asset-building opportunities more expensive, in the form of higher interest rates and payments. This fi nding highlights the need for fi nancial empowerment services in these neighborhoods.

Finding #3: Revolving debt burdens for households in low-income neighborhoods are greater than those of 

high-income households.

Credit card debt is one of the most common types of consumer debt held. Today, Americans owe $800 billion in 

credit card debt.iv New Yorkers carry an estimated average balance of $9,660 on their credit cards, compared to 

$11,863 nationally.v As expected, residents in higher-income neighborhoods have higher credit card balances and 

more available lines of credit than those in lower-income neighborhoods. Nearly one in fi ve New York households 

(18 percent) have extremely high credit card balances (more than $10,000), higher than nationally (13 percent). In 

certain higher-income Manhattan neighborhoods, one out of every 10 households is carrying credit card balances 

in excess of $10,000. 

In analyzing revolving balances held by households in New York City’s 10 lowest-income neighborhoods we 

found that residents are carrying relatively high credit card balances, given that the median income of these 

neighborhoods is less than $28,000. In some neighborhoods, over half of households carry a balance greater 

than $4,000. Even though residents of these neighborhoods are less likely to have high credit card balances 

compared to residents of higher-income neighborhoods, outstanding balances are a larger burden given the 

lower income levels. For example, in Central Harlem, where the neighborhood median income is $27,000, more 

than half (54 percent) of residents have a credit card balance above $4,000. This is 15 percent of a typical household’s income, which makes a seemingly low credit card balance much greater.

Manhattan

Bronx

Brooklyn

Queens

Staten Island

New York City

Nationwide

23%

66%

41%

30%

21%

36%

43%

0% 10% 20% 30% 40% 50% 60% 70%

Chart 2. Percent of Households Using More Than 30% of Available Credit

Credit card utilization rates are a function of how much credit is available to consumers. Compared to households 

nationally, New York City households are just as likely to receive new credit above $5,000 (35 percent). However, 

residents of low-income neighborhoods with high concentrations of unbanked households tend to have fewer 

lines of credit and lower credit limits than residents of high-income neighborhoods. Families in higher-income 

neighborhoods are more likely to receive larger credit lines (over $10,000). In the top 10 unbanked neighborhoods, 

roughly three-quarters of households which access credit received new credit less than $5,000. Since residents of 

low-income neighborhoods have lower credit limits, this can lead to higher credit card utilization rates. 

i
A telling indicator of fi nancial distress is how 

much discretionary income families have 

available every month. Discretionary income 

describes the spending capacity of a household 

after basic cost-of-living expenses are met, 

such as housing, food, clothing, and transportation. Nationwide, just over a quarter (26 

percent) of households have no discretionary 

income. In New York City, almost twice as many 

households have no discretionary income (48 

percent). This is not surprising given the high 

cost of living in New York City, where the average family must devote nearly half its monthly 

income to rentvi. In eight of the top 10 unbanked 

neighborhoods, households have the least 

spending capacity. In these neighborhoods, 

more than 80 percent of families have no discretionary income. These households are living paycheck to paycheck, with limited capacity to save, get out of debt, or plan for the future. 

FE BRIEF

Finding #4: Almost half of New York City households have no money at the end of the month—twice as much as the 

national average.

Chart 4. Percent of Households with No Discretionary Income

February 2011 NYC Department of Consumer Affairs Offi ce of Financial Empowerment

Manhattan

Bronx

Brooklyn

Queens

Staten Island

New York City

Nationwide

34%

73%

56%

50%

48%

26%

7%

0% 10% 20% 30% 40% 50% 60% 70% 80%

60%

50%

40%

30%

20%

10%

0%

42%

BX2 BX1 BX6 BX3 BX5 BK16 BX4 MN10 MN11 BK3

38%

45%

38% 41%

47%

58%

54% 50%

38%

Chart 3. 10 Lowest-Income NYC Neighborhoods: Percent of Households with Revolving Balances Greater Than $4,000

Neighborhood Legend

 BX1= Bronx Community District 1 (Mott Haven, Melrose, Port Morris)

 BX2 = Bronx Community District 2 (Hunts Point, Longwood)

 BX3 = Bronx Community District 3 (Melrose, Morrisania, Claremont, Crotona Park East)

 BX4 = Bronx Community District 4 (Highbridge, Concourse)

 BX5 = Bronx Community District 5 (Morris Heights, University Heights, Fordham, Mount Hope)

 BX6 = Bronx Community District 6 (East Tremont, Bathgate, Belmont, West Farms)

 BK3 = Brooklyn Community District 3 (Bedford Stuyvesant, Tompkins Park North)

 BK16 = Brooklyn Community District 16 (Ocean Hill, Brownsville)

 MN10 = Manhattan Community District 10 (Central Harlem)

 MN11 = Manhattan Community District 11 (East Harlem)
Conclusion

Access to credit has shifted in recent decades. Individuals and households who may not be formally engaged with 

the banking system have access to credit to meet consumer needs. While this has provided many consumers with 

greater liquidity to cover costs, establish credit, and build assets, there can be adverse effects if credit is not used 

productively and managed well. 

The Citywide Financial Services Study provides evidence of households in highly unbanked neighborhoods relying more on credit cards and carrying larger balances (as a percentage of their income and their credit limits) than 

those in other neighborhoods. Since the economic downturn, fi nancial institutions have been reducing credit 

limits and availability of new lines of credit. This can lead consumers to overextend their credit usage rather 

than using conventional banking and savings accounts. Combined with low credit limits, a reliance on credit can 

cause credit scores to plummet, further impacting the cost of future credit as well as access to housing, jobs, 

and affordable goods and services. 

Examining and understanding these patterns of credit access, use, and debt levels can provide a blueprint to 

developing the types of programs, policies, and initiatives that can empower New Yorkers to move out of debt, 

improve their credit, and establish long-term banking practices.

How To Use This Data 

The NYC Department of Consumer Affairs Offi ce of Financial Empowerment has compiled this data on credit 

availability and usage at the neighborhood level to better target its programs and initiatives to support populations most in need. Data can be used by researchers, practitioners, policymakers, and fi nancial institutions to 

determine the banking and credit needs of targeted communities. 

For Financial Institutions: 

• Identify underserved areas and tap new branch and market opportunities

• Develop innovative programs and tailor products to meet customer demand

For Nonprofi t Organizations:

• Develop new programs and initiatives 

• Improve outreach by targeting high-need neighborhoods

• Use community level data to identify need 

• Demonstrate the need for services to funders, policymakers, and others

For Policymakers and Advocacy Organizations:

• Identify legislative solutions that provide equitable banking and credit access in low-income communities

For a complete data set of fi ndings and neighborhood profi les, visit www.nyc.gov/ofe

i

Federal Reserve Board. “Changes in U.S. Family Finances from 2004 to 2007: Evidence from Survey of Consumer Finances,” Federal Reserve Bulletin, 

vol. 95 (February 2009)

iiTh e percent increase was obtained from January 2007–January 2008 Experian Data on monthly debt payments (excluding mortgages) by borough and 

weighting it by the adult population of each borough using U.S. Census Bureau, 2005–2007 American Community Survey data.

iiiTh ey include: Washington Heights / Inwood (46%); Highbridge / Concourse (51%); Morris Heights / University Heights (53%); Ocean Hill / Brownsville (47%); Bushwick (47%); West Harlem (38%); Central Harlem (36%); East Harlem (37%); Jamaica (24%); and Mott Haven / Melrose (56%) ivFederal Reserve Board G19 Report (August 2010), available at http://www.federalreserve.gov/RELEASES/g19/. 

v

(2009) “Assets & Opportunity Profi le: New York City.” Corporation for Enterprise Development. Asset poverty estimates calculated by Beacon Economics, 

based on U.S. Census Bureau’s 2004 Survey of Income and Program Participation, Wave 6 (2006) and 2005–2007 American Community Survey. viCommunity Service Society Press Release, Making the Rent: Escalating Rents Creating New Hardships for the City’s Poor (Dec. 14, 2006), available 

at http://www.cssny.org/news/releases/2006_1214.html. 
FE

FINANCIAL

EMPOWERMENT FEBRUARY 2011

BRIEF

Printed on 30% 

post consumer

recycled paper

42 Broadway, 8th Floor

New York, NY 10004

www.nyc.gov/ofe
Financial Empowerment Centers – Data 

What We’ve Accomplished, June 2008 - April 2011

Counseling sessions conducted

Clients served 

Credit reports reviewed

Budgets created

Debt reduced 

Savings realized

18,763

10,280

7,102

5,239

$4,200,000

$367,000

How We’re Reaching New Yorkers 

Who We’re Helping 

Race/Ethnicity Employment Status 

 

Income and Financial Health 

Income 

Average $16,092 

Median $13,008 

Debt 

Have some debt 55% 

Average debt $41,944 

Median debt $11,000 

Savings 

Have some savings 21% 

Average savings $12,267 

Median savings $1,400 

Banking Patterns 

Unbanked 27% 
Financial Empowerment Centers - Locations 

Bronx 

New York City Financial Empowerment Center 

At Phipps Opportunity Center

3125 Third Avenue, Bronx, NY 10451 

New York City Financial Empowerment Center 

At Catholic Charities HomeBase 

2155 Blackrock Avenue, Bronx, NY 10472 

New York City Financial Empowerment Center 

At East Side House 

337 Alexander Avenue, Bronx, NY 10454 

*New York City Financial Empowerment Center 

At Goodwill Industries 

361 East 149th Street, Bronx, NY 10455 

New York City Financial Empowerment Center

At Neighborhood Housing Services of the South Bronx

848 Concourse Village West, Bronx, NY 10451 

New York City Financial Empowerment Center 

At West Farms Technology & Career Center

1071A East Tremont Avenue, Bronx, NY 10460 

Brooklyn 

New York City Financial Empowerment Center 

At Bedford Stuyvesant Restoration Corporation

1406 Fulton Street, Brooklyn, NY 11216 

*New York City Financial Empowerment Center 

At Brooklyn Family Justice Center 

350 Jay Street, Brooklyn, NY 11201

New York City Financial Empowerment Center 

At Partnership for the Homeless

100 Pennsylvania Avenue, 2nd Floor, Brooklyn, NY 11207 

*New York City Financial Empowerment Center 

At South Brooklyn Legal Services 

105 Court Street, 3rd Floor, Brooklyn, NY 11201 

Manhattan 

New York City Financial Empowerment Center 

At Neighborhood Housing Services of New York City

307 West 36th Street, 12th Floor, New York, NY 10018 

New York City Financial Empowerment Center 

At Northern Manhattan Improvement Corporation

76 Wadsworth Avenue, New York, NY 10033 

New York City Financial Empowerment Center 

At Asian Americans for Equality

111 Division Street, New York, NY 10002 

Manhattan (continued) 

*New York City Financial Empowerment Center

At Henry Street Settlement 

Workforce Development Center 

99 Essex Street, 3rd Floor, New York, NY 10002 

New York City Financial Empowerment Center 

At Lower East Side People's Federal Credit Union 

37 Avenue B, New York, NY 10009 

New York City Financial Empowerment Center 

At Midtown Community Court 

314 West 54th Street, New York, NY 10019 

New York City Financial Empowerment Center 

At Seedco's Upper Manhattan One-Stop Career Center

215 West 125th Street, 6th Floor, New York, NY 10027 

Queens 

New York City Financial Empowerment Center 

At Catholic Charities HomeBase

87-80 Merrick Boulevard, 2nd Floor, Jamaica, NY 11432 

New York City Financial Empowerment Center 

At Queens Community House

74-09 37th Avenue, 4th Floor, Room 417B 

Jackson Heights, NY 11372 

New York City Financial Empowerment Center 

At Queens Library in Jackson Heights

35-51 81st Street, Jackson Heights, NY 11372 

New York City Financial Empowerment Center 

At Queens Library in Long Island City

37-44 21st Street, Long Island City, NY 11105 

New York City Financial Empowerment Center 

At Safe Space

89-74 162nd Street, 3rd Floor, Jamaica, NY 11432 

Staten Island 

New York City Financial Empowerment Center 

At El Centro Del Inmigrante

1546 Castleton Avenue, Staten Island, NY 10302 

New York City Financial Empowerment Center 

At Neighborhood Housing Services Staten Island 

770 Castleton Avenue, Staten Island, NY 10310

New York City Financial Empowerment Center 

At Staten Island Legal Services 

36 Richmond Terrace, Suite 205, Staten Island, NY 10301

Visit the Department of Consumer Affairs Office of Financial Empowerment online at nyc.gov/ofe

*Centers with an asterisk only serve clients of the organizations 

where they are located. All other Centers are open to the public. 

Information is effective May 10, 2011.