Credit cards bedevil Nevadans

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.

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.