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Jun. 20, 2008
Copyright © Las Vegas Review-Journal

Credit cards bedevil Nevadans

Silver State residents lead the nation in delinquent payments on 'plastic'

By JOHN G. EDWARDS
REVIEW-JOURNAL
 



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The percentage of Nevada consumers late in making bank credit card payments dropped by 10.8 percent during the first quarter, but Nevadans remain some of the most indebted and most delinquent credit card users in the nation, a credit reporting company revealed.

A larger percentage of consumers in Nevada are delinquent on credit card payments than in any other state, TransUnion of Chicago said this week.

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    • In Nevada, 1.74 percent of cardholders were delinquent on March 31, compared with 1.19 percent nationally. The delinquency rate in Nevada, however, fell from 1.95 percent at the end of last year, according to TransUnion.

    "A decline means that maybe the worst days are behind the Nevada economy," said Jeff Thredgold, economist for Nevada State Bank.

    Thredgold said consumers are probably getting more conservative in credit card use because they don't know what economic news they will get next.

    The lowest credit card loan delinquency rates were in North Dakota, followed by Utah and South Dakota.

    Thredgold said the disparity between Nevada and Utah probably results from their different economic cycles. While Nevada's boom turned to a bust, Utah's economic trends have been more moderate, he said.

    Michele Johnson, president of the Consumer Credit Counseling Service of Southern Nevada, doubted Nevada led the country in credit card delinquencies when the economy was surging, home prices were appreciating and people were tapping their growing home equity to borrow more money.

    Some financially struggling consumers now are borrowing from second home loan credit lines to make mortgage payments on their primary homes as monthly mortgage bills and gasoline prices increase, she said. But lenders are starting to freeze lines of credit because of drops in home values in recent months.

    Consumers can get cash advances to make payments until they max out their credit cards, "and the house of cards tumbles," Johnson said.

    Rick Yarnall, a bankruptcy trustee for consumers in Chapter 13 cases, suggested many debtors used their tax refunds to pay down their debts and buy more time to get back on their feet financially.

    "I don't know that Nevada has improved its economic lot in the last six months," Yarnall said. "Stay tuned and see what happens the rest of the year."

    Nevadans also carry some of the highest credit card balances, an average of $1,867, which is sixth highest nationally, TransUnion said. The average balance declined slightly from $1,870 at the end of last year.

    Nationally, TransUnion reported the first drop in credit card debt and loan delinquencies since the start of 2007.

    The national average credit card debt dropped 1.25 percent from three months earlier to $1,673. The ratio of credit card borrowers delinquent on one or more of their credit cards declined to 1.19 percent in the first quarter, a drop of 12.5 percent over year-end 2007.

    "Overall, the most recent deceleration, however slight, in mortgage delinquency rate is reflected in the bank card market as consumers take stock of their overall debt and begin to catch up on their repayment schedule wherever possible," Ezra Beck, principal consultant in TransUnion's financial services group, said in a statement.

    "Even states like California, Florida and Nevada (that) have experienced large increases over the last four quarters in their bank card delinquency rates showed a drop in the first quarter," Beck said.

    Beck expects Nevada to have the highest average delinquency rate by the end of the year.

    Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.

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    Beth wrote on November 29, 2008 09:47 AM: I have never been late with my citi card payment. My 7.99% is going up to 18.99% according to my letter. I do have the option to "opt out" because that's an extreme increase. I guess the bailout plan or our state rep is useless. How can they get away with that?


    lv h8r wrote on June 20, 2008 05:49 PM: This doesnt surprise me, and wiseguy22235 is right.. this place leads the nation is almost every bad category. I would love to see statistics on equity around here, the number of homeowners who took out loans against their house to buy all those luxury cars you see all over the place. When I moved here I saw wealth all over the place. Then I read stories about how the casinos pay low wages, how the school systems pay no money.. and i wondered where all these people could live like they were. The obvious way, they were tapping into credit in every way they could. How about it, do we really know how many people here actually have any equity in their homes anymore ?


    obamanation wrote on June 20, 2008 12:06 PM: Don't worry!

    When hussein is elected everything will be fine...just like in California!


    wiseguy2235 wrote on June 20, 2008 11:28 AM: so las vegas has one of the worst educational systems, highest crime rates, highest foreclosure rates, and worst doctors. we lead the nation in EVERY bad category.

    i laugh because these people that can't pay their bills now can eat their flat screens TVs, hummers with rims, and vacation photos. same people that took out home equity loans for superficial stuff. what a great community this is!!!


    Dr J wrote on June 20, 2008 11:22 AM: No surprise here. With morons putting their paychecks in computerized slot machines trying to "double it" and getting "free drinks", they have no money left. I can't count how many times I have heard "I'm going to change this $100 into a $1000".

    Want to live well? Cut the gambling, live within your means and have credit not debt.


    broke in LV wrote on June 20, 2008 11:02 AM: Mortgage broker says "if you plan on moving to a newer/bigger house in two years then get this loan . . its alot cheaper" -- then two years later when the interest rate resets to 12% & the house wont sell, credit cards get used to make ip the monthly difference. . . . . anyone who would not want to put their family on the street would do the same thing, besides - when the house sells then you can pay back the creditors, and if it doesn't then there's always bankrupcy or forclosure.


    Reason wrote on June 20, 2008 10:36 AM: If you don't have the money in your checking account, don't buy it.


    Herb wrote on June 20, 2008 10:24 AM: Compulsive gamblers taking out cash advances at casinos plays a role in this.


    seer scrying wrote on June 20, 2008 07:56 AM: Hey br, look at the insightful posts above yours.

    Just like the mortgage mess, people live outside of their means, then they cry foul when it catches up to them.

    The said part is that when the dust settles and the real debt is due to be paid off, it will land in the laps of us saps who figure out a way to make ends meet and pay our bills every month.


    Irma wrote on June 20, 2008 07:43 AM: Lower delinquency rates in Utah, Dakotas, and probably other farm states has more to do with work ethics that the economic cycle.


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