In the past couple of years, more Americans in a financial bind due to lack of income have made the choice to prioritize credit card payments over mortgage payments. With the close of 2009 statistics illustrated that twice as many debtors were delinquent when it came to paying their mortgage while paying credit card payments rather than paying their mortgages off first and then credit card bills.
Some of this new trend could be chalked off to the credit crunch and lower balances on cards in general, but it is even more likely for people that are watching the real estate market erode to lose faith in the value in their homes and simply give up. For a number of homeowners, walking away from their houses with mortgages that they just cannot afford seems like the only decision to make.
A common reason that many homeowners give for walking out on mortgage payments is that the only punishment is a bad credit score, which seems inevitable in this economy anyway, which leaves them little incentive to keep paying money while not building equity. Although Americans like to take pride in the fact that we are a “civilized and industrial” country, many Americans struggle to obtain the bare necessities: food, water and shelter.
In times of need, when there is no money on hand to feed families, credit cards become the usual financing strategy. Understandably, there is a set of reasoning that comes with prioritizing the bills this way. If a credit card is removed, someone loses the opportunity to ensure that they will have food to eat and clean water to drink and bathe in, heat in the winter, or a car to take them to work and back.
Still, experts urge Americans in this situation to try their hardest to place their mortgage higher on their priority list. A mortgage is a secured debt, which means that the bank that holds your mortgage has the ability to remove it if you don’t pay because your house is collateral. Even still, some people have no problem leaving a house whose value has shrunk dramatically, choosing to rent instead. But in a situation like this, playing the waiting game might be the best choice. Eventually the real estate market will come around, and it will pay to own a home at that time.
Mallory works for Rapid Recovery Solution and writes articles on medical collection agencies Check here for free reprint licence: More Americans Forced Into Making The Decision Between Bare Necessities And Shelter.