Return to Normal as Consumers Pay Mortgages Before Credit Cards
For the first time since the financial crisis of 2008, consumers across the country are prioritizing their mortgages ahead of their credit card payments, according to TransUnion.
The credit bureau's annual Payment Hierarchy Study also found that since at least 2003, consumers have been paying their auto loans ahead of their mortgages and credit cards "by a wide margin."
The traditional hierarchy of paying the mortgage before the credit card bill was upended by the Great Recession, according to Ezra Becker, a co-author of the study and a vice president of research and consulting for TransUnion.
"Many consumers were underwater on their mortgages and at the same time needed the liquidity afforded by credit cards to make ends meet," he said in a press release issued Wednesday.
As the unemployment rate improves and housing prices recover, the return to the normal pattern is expected to take hold in every major metropolitan area, Becker said.