Idahoans In Credit Crunch Charge Card Debt Of $1,600 Per Person Among Highest In Nation

Idaho carries one of the heaviest credit card debts in the nation, undermining the myth that its citizens are some of the most fiscally conservative people in the country.

The debt amounts to $1,600 per person - enough to rank Idaho sixth in the nation for per household credit card debt and ninth for per capita credit card debt.

Experts say many Idahoans may be compensating for low incomes by pushing daily expenses onto their charge cards.

As of this January, Idaho residents carried a credit card debt of $1.6 billion, according to a study by CardTrack of America Inc. in Maryland.

The phenomenon can be explained by the inverse relationship between personal income and credit card debt, said Robert McKinley, president of CardTrack which has studied the credit card industry since 1986.

“Those states with lower incomes often have a higher ratio to debt,” McKinley said. “Consumers essentially use a credit card as a borrowing tool.”

Shirley Treharne, executive director of Consumer Credit Counseling Service of Idaho, said she has seen lots of people fall on hard times because they use credit cards as a financial crutch.

“Credit cards have become so easy to get, there’s a real temptation to use them as a crutch to supplement income,” Treharne said.

Idaho is not an affluent state. Its per capita income in 1994 was $18,525, about 85 percent of the U.S. per capita of $21,843, according to the state Division of Financial Management. Ranked nationally, Idaho’s per capita was 39th of the 50 states.

But while the state trails the nation in per capita wealth, its ratio of card debt to income exceeds the U.S. average. Idaho’s total card debt is about 8 percent of its total personal income, but the U.S. card debt is just 5 percent of the country’s total income.

In Idaho, 68 percent of all households hold a Visa or MasterCard, according to Equifax National Decision and Systems, a marketing data firm in San Diego, Calif.

The average U.S. credit card holder has 8 to 10 cards in all.

The picture may not be so bleak as the numbers suggest, U.S. Bancorp economist John Mitchell said.

To know how extended Idahoans are, its important to look at other data.

“You need to look at total assets and liabilities before jumping to conclusions,” Mitchell said.

He pointed out some factors like Idaho’s high ratio of millionaires to the population and a drop in personal bankruptcy filings.

Nationally, the number of personal bankruptcies filed in 1994 dropped 4 percent from the previous year. By comparison, Idaho’s filings dropped 7 percent.