The Great Recession and the subsequent housing crisis has turned Americans all weird when it comes to which bills we pay: A new study says we’re more likely to pay our credit card bills than our mortgages. It’s a trend that should’ve reversed itself by now, say experts. But that hasn’t happened yet.
Times used to be, average consumers paid their mortgages first, and then credit card bills. But TransUnion LLC, a Chicago-based credit score agency who conducted the study, says we have yet to return to that dynamic.
“The reversal of the traditional payment hierarchy was driven in large part by home value depreciation and rising unemployment, both of which speak to consumer willingness and ability to pay their mortgages versus their credit cards,” Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit, told Chicago Breaking Business.
The trend seems to have started in 2008, when more consumers were up to date on their credit card payments and were more likely delinquent on mortgages. And still, in 2010, the study says. 7.24% of consumers were paid up on credit card bills and delinquent on mortgages, compared to 3.03% who described their bills as the reverse.
Americans put credit card bill ahead of mortgage [Chicago Breaking Business]