Report: Nevada among most financially illiterate states

Nevada is near the bottom of yet another ranking of Americans’ financial health, with dismal findings of consumer spending habits.

The Silver State is second last among U.S. states and the District of Columbia for its percentage of residents who spend more money than they make; third last for the share of residents who borrow from non-bank lenders; and fourth last for people who pay only the minimum balance on their credit card bills, according to a report out today from personal-finance website WalletHub.

The report, “Most & Least Financially Literate States,” also ranked Nevada 46th for its share of residents with a bachelor’s degree or higher; 40th for its percentage of residents with a rainy day fund; 38th for its high-school dropout rate; and 32nd for its share of unbanked households.

Overall, WalletHub ranked Nevada second worst in the country for financial literacy, behind Mississippi.

New Hampshire was No. 1.

The findings reinforce Nevada’s dubious distinction as having some of the worst personal finances in the country.

In January, the nonprofit Corporation for Enterprise Development said many Nevadans are unable to “build a secure economic future,” as the state is racked by some of the highest rates of lousy consumer credit, bankruptcies, foreclosures, underemployment, mortgage delinquencies and uninsured residents.

The Washington, D.C., advocacy group for lower-income Americans ranked Nevada’s overall economic health 48th in the nation. Two years ago, it ranked Nevada dead last, saying a majority of residents were living “on the edge of financial disaster” with almost no savings to fall back on.

Meanwhile, U.S. banking regulators last fall reported that in Las Vegas, more people use check-cashing and payday loan companies than national averages, and a rising number of locals do not have a bank account.

About 15 percent of Las Vegas-area households reported using an “alternative financial service” in the past 30 days when surveyed in 2013, compared to 12 percent nationally, according to the Federal Deposit Insurance Corp.

Also, 6.9 percent of Las Vegas-area households were “unbanked” in 2013, meaning they did not have an account with an insured institution such as a bank or credit union. That was below the national rate of 7.6 percent but up from 2011, when the rate locally was 6.2 percent, the FDIC found.

Alternative lenders typically charge high interest rates and are used by people who need cash quickly and don’t qualify for a traditional bank loan.

Such customers typically borrow a few hundred dollars at a time, but triple-digit interest rates are often the norm.

In Nevada, payday lenders charge an average annual interest rate of 521 percent, one of the highest rates in the country, according to the Pew Charitable Trusts.

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