The rate at which consumers were current on their credit card payments but 30 days or more behind on their home loan rose to 7.4 percent at the end of the third quarter last year, according to a report from credit monitoring bureau TransUnion. That’s an increase from 4.3 percent at the end of the first quarter in 2008.
Meanwhile, the rate at which consumers were current on mortgage payments but delinquent on credit cards fell to 3.03 percent at the end of 2010 – the lowest point ever observed, the report said. In the first quarter of 2008, this rate stood at 4.1 percent.
“The reversal of the traditional payment hierarchy was driven in large part by home value depreciation and rising unemployment, both of which speak to consumer willingness and ability to pay their mortgages versus their credit cards,” said Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit.
A recent TransUnion poll also found that 79 percent of adults who could only make one payment in a given month would opt to reduce their mortgage debt rather than their credit card balance, the report said.
Delinquency rates for home loans remain unusually high while consumers have continually reduced their credit card debt in recent months.