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StumbleArea leads nation in credit card delinquency
Company says 2.6 percent of Las Vegans are delinquent
Monday, June 8, 2009 | 10:02 a.m.
Beyond the Sun
- Information for consumers struggling with debt is available from the Federal Trade Commission here.
Sun Topics
Las Vegas and Nevada are at the top of another economic list, this one showing they lead the nation in the percentage of consumers behind on credit card bills.
TransUnion.com, part of the credit-scoring company, today said Nevada leads the nation in the percentage of consumers delinquent on credit card obligations -- with 2.44 percent of Nevadans in that category through the first quarter of 2009.
That figure is up from 1.74 percent in the first quarter of 2008 as the recession has widened in the Silver State because of rising unemployment and soaring residential and commercial mortgage foreclosures.
Nationwide, the percentage of Americans delinquent on credit card bills rose from 1.19 percent in 2008's first quarter to 1.32 percent in the 2009 quarter.
And in this year's quarter, the Las Vegas area leads the nation's metropolitan areas in the delinquency percentage, with the city coming in at 2.6 percent.
An analyst at TransUnion said the numbers show how the decline in the residential real estate market, driven by soaring foreclosures, has affected credit card delinquencies. All of the top metro areas for residents being behind on credit card payments are cities that most frequently lead residential foreclosure rankings -- as the housing boom that lasted through 2007 has now busted.
"As expected, bankcard delinquencies increased in the first quarter both as a national average and in most areas of the country," Ezra Becker, director of consulting and strategy in TransUnion's financial services group, said in a statement. "As the recession entered its sixth quarter, we saw continued increases in average bankcard balances, as consumers struggled to meet repayment obligations in a job market that continues to deteriorate. This increase could be an indication that tax refund checks, typically used to pay down balances in during the first quarter in years past, are now being used to cover daily living expenses.
"At end of the 2001 recession, the national bankcard delinquency rate had increased to a high of 1.69 percent," continued Becker. "As that recession came to a close (in November of 2001), three of the five riskiest areas of the country in terms of bankcard delinquency were to be found in the South: North Carolina, Georgia, and South Carolina. In the current recession, Las Vegas is leading in terms of bankcard delinquency, but is followed closely by metropolitan areas within the state of Florida (Miami, 2.5 percent) and California (Stockton, 2.4 percent). This highlights one of the fundamental differences between the two recessions - the housing market.''
TransUnion said its data is culled quarterly from approximately 27 million anonymous, individual credit files.
The company also said:
-- Average bankcard borrower debt (defined as the aggregate balance on all bank-issued credit cards for an individual bankcard borrower) rose upward nationally 0.82 percent to $5,776 from the previous quarter's $5,729, and 4.09 percent compared to the first quarter of 2008 ($5,548). The highest state average bankcard debt remains in Alaska at $7,476, followed by Tennessee at $6,869 and Nevada at $6,677. The lowest average bankcard debt was found in Iowa ($4,300), followed by North Dakota ($4,414) and West Virginia ($4,640).
-- Incidence of bank card delinquency in 2009's first quarter was highest in Nevada, followed closely by Florida (1.9 percent) and Arizona (1.68 percent). The lowest bank card delinquency incidence rates were found in North Dakota (0.73 percent), South Dakota (0.77 percent) and Alaska (0.77 percent).
-- Things are likely to get worse before they get better in Nevada, which is expected to still have the nation's highest delinquency rate by the end of 2009 (2.95 percent).
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shocker.
Personally, I'm surprised the delinquency rate in NV is only 2.44%. So more than 97% of Nevadans that use credit cards are not delinquent?
Deadbeats resolving their credit card debt merely quit paying.
Several months will go by before the lender will contact them offering a deal, typically a short-term (~3 to 4 months) of "enhanced" payments that repay a fraction of their outstanding debt typically 30 to 50% of what they owed.
Of course the deadbeat's credit rating will take a hit but most deadbeats consider such well worth the money they stole, I mean saved, by not fully paying back their obligation.
Note: Deadbeats must completely stop paying for several months (be sure to save that money for enhanced payments) in order for the lender's collection process to initiate which opens up negotiations to settlement. Any attempts to negotiate debt resolution with the lender prior to them initiating their collection process will be futile. Deadbeats also want to mention "financial hardship" as to the reason for their consecutive non-payments.
It's so stupid how CC companies will not try to work out a payment plan suitable for the debtor unless the debtor falls behind on payments.
I spent a week calling Chase every day, talking to "supervisors" trying to get them to lower my interest rate (which they increased without my consent or knowledge from 9% to 18%) after I had my hours cut by half at my job. Even though I was trying to do the right thing and stay current on my payments, they would not budge. When they didn't receive my payment the next month, then they called me offering to work out a payment plan with me.
The CC companies and banks are not in the business of helping their customers, they are in the business of squeezing every last cent they can from their customers.
Screw the CC companies. They jack up interest rates to ridiculous levels then wonder why people default.
FWI:
Additional info released today plus 'THE WORLD'S WORST CREDIT CARDS' at site below:
http://articles.moneycentral.msn.com/Ban...
Credit card companies should do better job of screening their customers. My heart goes out to the people who have fallen behind because they have lost their jobs. However for those deadbeats who have been living beyound their means they should be made to pay all of their debts. Credit card companies are worst then the mafie loansharks or maybe they are the same and we just have not realized it.
NO ONE likes not paying their bills, but when you have to decide whether to pay your credit cards bills or put food on the table for your family and a roof over their heads after you have lost your job - guess what is going to win out. Unemployment only goes so far and unfortunately, the necessities to live are more important than worrying about paying a credit card bill. In these very tough times, there are way too many of us who have to struggle to make ends meet - and that is just to pay the rent and utilities and groceries. I was enrolled in one of those debt relief plans. All was going well and I was beginning to see light at the end of the tunnel, but then I lost my job. There was no way I could continue with the program with just unemployment coming in so I had to terminate the program. Now my credit is going to be permanently in the toilet with no longer any chance of even trying to catch up when and if I ever get a job. Nevada is one of those states that you can't have a measly 20 hr a week part time job without it effecting your unemployment. Many States allow you to work those 20 hours a week without it being deducted out of your unemployment. Unfortunately, Nevada is not one of them. I have now been out of work since November. I have made every effort on a daily basis to look for a job but the creditors keep calling and just don't understand that no, I can't give them any money since I don't have it. It sucks. However, some have been nice and understanding and will wait until I get a job to pay them. But....to add insult to injury - it wouldn't make me feel so bad if the annoying bill collector on the phone was actually an American calling from the United States and not some foreign country!!