From the good folks over at US News & World Report is this interesting article, “Forget the Mortgage, I’m Paying My Credit Card Bill” by Luke Mullins.
Amid high unemployment and sliding home prices, a growing number of struggling consumers are doing what was once considered unthinkable: paying their credit card bills instead of their mortgages. A recent study developed by TransUnion found the percentage of Americans who were current on their credit cards but behind on their mortgage increased to 6.6 percent in the third quarter of 2009, up from 4.3 percent in the first quarter of 2008. Meanwhile, the share of consumers making mortgage payments on time but behind on their credit cards moved in the opposite direction, sliding from 4.1 percent to 3.6 percent over the same time period.
The data reflects a “fundamental paradigm shift” in the way consumers prioritize payment of debt obligations, says Ezra Becker, of TransUnion. “This is dramatically different,” he says. “It is a clear manifestation of the dynamics that lead up to the recession and the recession itself.” – Source
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