Paying Credit Cards Instead of Mortgages?
Check this out… According to TransUnion, which is one of the big three credit bureaus, credit card delinquencies are currently at their lowest level in 17 years.
Surprised? I am. Given all the tight job market, stagnant wages, and increasing food prices (among other thing), I wouldn't have expected it.
At the same time, however, more Americans are falling behind on their mortgages. According to Charlie Wise, TransUnion's director of research and consulting, “Consumers are protecting their credit cards. It gives them financial flexibility.”
Back in 2008, 4.3% of consumers were current on their credit cards but behind on their mortgages. Fast forward to 2010, when that number climbed to 7.4%. On the flip side, the number of consumers that are delinquent on their credit cards but current on their mortgages dropped from 4.1% to 3.0%.
So the numbers here aren't huge, but there's a definite pattern - and the relative changes are quite large. But why? Historically, people in financial trouble have tended to pay stay current on their mortgages while letting their other obligations slide. So why the reversal?
Experts say it's because the housing market is so bad that consumers are being forced to make tough choices. As it becomes clear that they're going to lose their homes, more people are choosing to protect the few financial tools they have left.
Whatever the cause, it's an interesting - and potentially troubling - change.
The original article can be found at FiveCentNickel.com:Paying Credit Cards Instead of Mortgages?