Average balance for Nevada credit card holders drops to $6,517

By Steve Green

Wednesday, Aug. 26, 2009 | 10:02 a.m.

A good-news, bad-news report is out on the Nevada economy -- this one concerning credit card delinquency rates.

TransUnion.com of Chicago, which compiles consumer credit reports, reported Tuesday that the credit card delinquency rate in Nevada in the second quarter was 2.19 percent -- down from 2.44 percent in the first quarter.

And Nevada was No. 3 in the nation in terms of reductions in credit card debt. Nevadans reduced such debt by 2.4 percent in the quarter as they put the brakes on spending and credit card companies reduced borrowing limits.

The average Nevada credit card holder now owes $6,517 on cards, the third-highest level in the nation, TransUnion said. That number is down from $6,677 in the first quarter.

The bad news for Nevada is that its 2.19 percent delinquency rate in the quarter was the highest in the nation, and Nevada is projected to remain at the top of the list with the state rate growing to an expected 2.25 percent by the end of the year, TransUnion said.

In July the unemployment rate in Nevada was 12.5 percent and in Las Vegas it hit 13.1 percent.

TransUnion, basing its report on data from 27 million credit files, said that nationwide, the second quarter delinquency rate fell to 1.17 percent from 1.32 percent in the first quarter.

"The second quarter of 2009 has marked the first time we have seen a drop in the credit card delinquency rate over the past year. However, in looking at the historical trends back to the beginning of 1999, we observe that the credit card delinquency rate routinely drops after the first quarter -- something that occurs 80 percent of the time. A clear indicator of seasonal patterns in consumer credit dynamics, the same across-the-board reduction in delinquency rates at the state level was also observed in the second quarter of 2008," Ezra Becker, director of consulting and strategy in TransUnion's financial services group, said in a statement. "Therefore, the recent change in delinquency may be more the result of seasonal fluctuations rather than a marked turnaround in nonpayment credit card behavior. In any event, credit card delinquency remains well within historical norms and is not a cause for significant concern at this time.''

TransUnion said it sees economic improvements nationwide and forecast the U.S. delinquency rate will hit 1.2 percent nationwide by the end of the year and then decline.

"TransUnion is seeing marginal improvement on the economic front. Recent data on the U.S. unemployment rate (dropping to 9.4 percent in July) gives some credence to the idea that we may have hit the bottom of the recession, impacting not only the equity markets, but also consumer confidence,'' Becker said in his statement. ``If the unemployment numbers remain true to form over the next two quarters and the stock market continues to rise, we could see delinquencies begin to drop near the beginning of 2010."