Continuing a three year trend, the consumer continues to pay credit cards before they make mortgage payments, according to MSNBC.com. This demonstrates the drop in housing values and increase in the numbers of unemployed.
The persistence of the reversal shows that consumers don’t want to lose access to credit on their cards, especially if they depend on using them to make necessary purchases. “You can’t buy groceries with your house,” [Sean] Reardon said.
Further, because a credit card payment is so much lower than a house payment, it’s easier to make. As the consumer remains cash strapped, the trend is expected to continue.
I think as the economy continues to suffer that this will continue to be the case. Paying a $600 house payment when you do not have much of an income is a lot harder than paying a $50 minimum credit card bill payment. Plus, as stated in the article, consumers are relying on these credit cards to purchase groceries and other necessities.