As 2011 winds down, many people are finding themselves having a difficult time juggling their bills each month. Whether due to a job loss, illness in the family, or unexpected expenses this can be a difficult time for your family.
Feeling the pinch in your monthly finances may also mean making choices as to which bills you are able to pay each month. With credit card debt, home mortgages, and other monthly bills all competing for your dollar it can be hard to make a choice.
According to an article by Christopher Quinn in the Atlanta Journal Constitution, there is a new trend in how homeowners are choosing to use what monthly income they have available for paying down their debts:
More consumers are choosing to pay credit card debts while letting the mortgage slip, helping push credit card delinquencies to their lowest point in 17 years, financial services and risk management firm TransUnion said.
Historically, Americans protected their house payment and were more apt to be delinquent on credit card payments, said Charlie Wise, the company’s director of research and consulting. But crashing home values and desperation have caused that to flip since 2008.
Consumers are making tough choices based on which asset gives them what they need in tough times.
“Consumers are protecting their credit cards. It gives them financial flexibility,” Wise said.
The number of consumers current on credit card payments but delinquent on mortgages was 4.3 percent in 2008 but rose to 7.4 percent in 2010.
The shift in consumer attitude is not surprising, said Dan Immergluck, a professor of city planning at Georgia Tech and an expert on foreclosures. More people under foreclosure realize and accept they are losing their homes and so choose to protect their remaining financial tools.