Area leads nation in credit card delinquency

By Steve Green

Monday, June 8, 2009 | 10:02 a.m.

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).