Arizonans are having a tougher time managing credit card and mortgage debt than consumers in most other states, according to first-quarter data compiled by credit and information management company TransUnion.
Arizona had the third-highest 90-day credit card delinquency rate among all states, as well as the third-highest 60-day mortgage loan delinquency rate. The only states with higher delinquency rates were Nevada and Florida.
In terms of credit card delinquency, Arizona's 1.68 percent rate was 36 basis points higher than the national average, which was 1.32 percent. For mortgage delinquency, Arizona's 8.51 percent rate was about 3.3 percent higher than the national rate of 5.22 percent.
At 1.01 percent, Arizona's auto loan delinquency rate ranked 11th in the nation while higher than the U.S. average of 0.83 percent.
The national mortgage delinquency rate is up nearly 14 percent from the previous quarter, according to TransUnion.
"The troubling news is that the mortgage delinquency rate continues to climb upward at an average quarterly pace almost doubling that experienced in the last recession," said Keith Carson, a senior consultant in TransUnion's financial services group. "During the 2001 recession, the average quarter-to-quarter national mortgage delinquency growth rate was nearly 6.5 percent, compared to the nearly 12 percent quarter-to-quarter delinquency growth we are experiencing today."
Tim James, professor of economics at the W.P. Carey School of Business at Arizona State University, isn't surprised that Arizona ranks among the top states in credit card and mortgage loan delinquency.
"We've got a lot of people who are in blue collar jobs here who don't have the same amount of savings as people who are in executive-managerial white-collar jobs, and that's one of the reasons the downturn has affected people in terms of their ability to make payments on credit agreements more in Arizona than say California or some of the states back East," he said.
Continuing increases in credit card balances could indicate that consumers who normally would have used tax refund checks to pay down balances instead used them to cover daily living expenses, according to TransUnion.
Since first-quarter 2008, Arizona has climbed from sixth to third in 60-day mortgage loan delinquencies, and from ninth to third in 90-day credit card delinquencies, according to TransUnion.
Higher delinquencies are indicative of people walking away from credit agreements because they can, James said.
"It's all part of a package of, 'well, I just give up, I just can't try anymore,' and moving on," he said. "Also, on average, we're just not as wealthy as some of the other states are, and we've got an awful lot of people ... who live one paycheck to another, and so the downturn is affecting them more severely than people who have savings."
Higher delinquency rates affect everyone because many creditors now determine creditworthiness by ZIP code, James said.
"I know significant cases of people in this state who suffered as a result of trying to get loans, who don't have bad credit, have good credit histories, but can't really get loans at reasonable rates even if they can get a loan because of this effect," he said.