Consumers today have a long list of monthly bills, but faced with a mortgage and credit card bill, which do you pay first?
Transunion, one of the three major credit reporting bureaus in the United States, released information earlier this month from a study that reported more consumers are paying their credit card statement first, and then paying their mortgage. The people delinquent on their mortgages but current on credit cards increased from 4.9 percent in the third quarter of 2008 to 6.6 percent in the third quarter of 2009.
More people are now depending on their credit card for day to day expenses, including gas and food, but consumers can still afford to make their minimum credit card payment more often than they can afford to make their mortgage payment.
Michelle Singletary of the Washington Post commented on the trend in her column, “I hope this trend is only temporary. Relying on your credit card is like having a life jacket with a slow leak. It may keep you afloat for a little while, but the protection is short-term. You'll still sink.”
There are resources available for consumers interested in reversing this trend to avoid sinking:
For assistance with credit and debt management, consumers can contact the National Foundation for Credit Counseling.
For tips to stay afloat with your credit card payments and budgeting, visit BBB’s consumer finance and credit tips.