South Floridians used and abused their credit cards, and some are woefully behind in payments. In fact, South Florida has the worst credit ranking in the nation.
So says an index released early Wednesday by CredAbility, a nonprofit credit counseling agency. Of the 25 top metro areas surveyed, Broward, Palm Beach and Miami-Dade counties rate the worst at trying to dig themselves out of credit card debt.
South Florida suffered the highest mortgage and credit card delinquency rates of the metro areas surveyed ? even worse than Detroit, New York, Los Angeles and Atlanta, the CredAbility's Consumer Distress Index found.
But many South Floridians are trying to improve their finances after borrowing heavily during the go-go years of the housing boom: The region's consumer distress scores have improved in a year, said Mark Cole, the survey's author and chief operating officer of CredAbility, which has been operating since 1964 and has an outlet in Palm Beach County.
Indeed, Experian, a global credit information firm, found that South Floridians had been floating more credit card debt than the national average, but by last fall, were aggressively paying down all personal debt.
However, South Florida's debt delinquency rate won't dramatically drop until the job market improves, CredAbility's Cole suggested. More jobs created in South Florida would put more cash into the pockets of tens of thousands of unemployed or underemployed workers who can't pay their bills, he said.
"We are all poor unless we have a job," said Armando Minutoli, of Delray Beach, who said he had to declare bankruptcy after he lost work as a recruiter in the aerospace industry and then had medical problems.
South Florida had the fourth highest number of bankruptcy filings among the 25 metro areas during the first quarter of 2012, CredAbility found.
As of March, the average South Florida household also had less than 2 1/2 months of living expenses saved in the event of an emergency? below the recommended three or even six months of expenses put away, CredAbility reported.
Meanwhile, many in South Florida have spent months looking for work. The National Employment Law Project, an advocate for the unemployed, reported that in 2011, more than half of older jobless workers in the United States were out of work for at least six months.
"People are overwhelmed," said Patrice Schroeder, of 211 Palm Beach/Treasure Coast. Some have been referred to charities' food pantries before they start getting food stamps, she said.
Once they do find work, many ? if not most ? have taken cuts in salary as they struggle to rebuild their family's finances.
Many South Floridians will have to go through another couple of years of pain while they pay down debt, predicted Jorge Salazar-Carrillo, an economics professor who directs the Center of Economic Research at Florida International University.
During the boom years before the bust, South Florida was cursed with lenders that gave credit too easily ? that encouraged many to borrow too much and to buy more house than they could afford, said Salazar-Carrillo.
"The [lending] standards were not as strict as they were in other areas. That's what has caused a good part of our problems," he said.
"We went too much into debt," agreed William B. Stronge, professor emeritus of economics at Florida Atlantic University. "People took out home equity loans to finance their spending."
South Floridians' current bill-paying woes also reflect a national trend of Americans struggling to stretch their paychecks to cover increasing costs.
"The performance over the past year [across the United Sates] indicates that households are saving less and have less money available after paying their monthly bills," Cole said.
But the good news, economist Stronge said, is that South Florida's economy is becoming sturdier, especially with the return of tourists. "They come back and we all benefit," he said.
FIU's Salazar-Carrillo compared South Florida's current economic problems to "one of those pythons found in the Everglades that goes through a period of digestion.
"It is going to take a couple more years for us to digest the debt in the system and then we can go back to being normal," he predicted.
Staff writer Marcia Heroux Pounds contributed to this report.
dgehrke@tribune.com, 954-356-4404 or Twitter @donnagehrke
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