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Americans are under the most financial distress in these cities, data suggests

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Published  February 18, 2026 3:11pm CST
Money
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FILE - Woman holding credit cards. (Getty Images)

The Brief

    • WalletHub found that despite cooling inflation on essentials like groceries and gas, many Americans are still experiencing financial distress, defined as having a credit account in forbearance or with deferred payments.
    • Chicago ranked No. 1 and saw a 30% increase in residents reporting financial distress, along with more skipped payments and spikes in searches for "debt" and "loans."
    • Analysts warn that while forbearance may offer temporary relief, interest continues to build, potentially making debt harder to repay, with Houston and Las Vegas ranking next behind Chicago.

Despite inflation cooling for many core items such as groceries, gas and rent, Americans are still dealing with financial distress, according to data collected by WalletHub.

Financial distress is defined as having a credit account in forbearance or with deferred payments, WalletHub said.

What they're saying:

"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," Chip Lupo, an analyst with WalletHub, said.

Here are the top 20 cities with the most financial distress: 

For a full list of 100 cities, click here. 

Chicago ranks No. 1

Dig deeper:

Chicago, Illinois, ranked No. 1 overall for the city with the most financial distress, according to WalletHub.

The data, which was collected between Q3 2024 and Q3 2025, found that there was a 30% increase in people reporting financial distress.

More Chicago residents were skipping payments due to their financial situation and there was a spike in Google searches with the terms "debt" and "loans."

Houston, Texas, ranked No. 2 and Las Vegas came in third. 

Inflation in the US

By the numbers:

Inflation dropped to 2.4% in January compared with a year earlier, down from 2.7% in December and not too far from the Federal Reserve’s 2% target.

Core prices, which exclude the volatile food and energy categories, rose just 2.5% in January from a year ago, down from 2.6% the previous month and the smallest increase since March 2021.

The other side:

On the other hand, consumer prices are still 25% higher than they were five years ago.

The Source: Information for this article was taken from data collected from 100 of the largest cities in the United States in September 2024 and September 2025. WalletHub used nine metrics across six overall categories including: credit score, people with accounts in distress, average number of accounts in distress, change in number of bankruptcy filings, "debt" search index, and "loans" search index. Previous reporting by The Associated Press also contributed. This story was reported from San Jose.

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