Americans are putting their mortgages ahead of their credit cards when they pay the bills, reversing an unusual pattern that had developed after the housing bust.
As home values plunged during the downturn, consumers began to default on their mortgages while continuing to make credit card payments, according to research from TransUnion, reversing a long-standing hierarchy in which lenders expected mortgages to be paid first.
New data from the credit-reporting firm reveal that the normal payment hierarchy returned at the end of last year, following around two years of rising home values. “People are paying their mortgages again ahead of their bank card,” said Steven Chaouki, a financial-services executive at TransUnion, though the payment relationship hasn’t returned entirely to pre-crisis levels.
The data also show that before, during and after the crisis, Americans are most likely to make their car payments first.
read more: http://blogs.wsj.com/economics/2014/05/27/consumers-are-back-to-paying-mortgages-ahead-of-credit-cards/
As home values plunged during the downturn, consumers began to default on their mortgages while continuing to make credit card payments, according to research from TransUnion, reversing a long-standing hierarchy in which lenders expected mortgages to be paid first.
New data from the credit-reporting firm reveal that the normal payment hierarchy returned at the end of last year, following around two years of rising home values. “People are paying their mortgages again ahead of their bank card,” said Steven Chaouki, a financial-services executive at TransUnion, though the payment relationship hasn’t returned entirely to pre-crisis levels.
The data also show that before, during and after the crisis, Americans are most likely to make their car payments first.
read more: http://blogs.wsj.com/economics/2014/05/27/consumers-are-back-to-paying-mortgages-ahead-of-credit-cards/
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