Consumers cut credit card debt before making mortgage payments
The number of consumers who are current on their credit card payments but 30 days or more behind on their mortgage rose to 7.4 percent in the third quarter of 2010, up from 4.3 percent in the first quarter of 2008, according to a new study by the credit reporting bureau TransUnion. On the other hand, consumers who were current on their mortgage payments but behind on credit cards slipped to 3.03 percent at the end of last year, the lowest rate ever observed.
Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit, attributed these changes to the continued nationwide loss of home value, and consumers’ willingness to pay their bills on underwater home loans, the report said.
Credit card defaults have continued to fall in recent months as consumers got a better handle on their finances, but instances of mortgage delinquency and foreclosure have remained considerably higher.