Photo by Marco Bellucci

I read an article on CNNMoney that exposed a new trend among the debt-ridden: paying their credit card bill before their mortgage.  You can read the original article by clicking the link:

Consumers paying credit card over mortgage

According to recent data, 6.6% of people are delinquent on their mortgage payments, but current on their credit cards.  Only 3.6% were current on their mortgage and behind on their credit cards.  Apparently it’s easier to walk away from a home with a declining equity stake than it is to fall behind on your favorite payment tool.

Mr. Bubble

The housing bubble is to blame for this turnabout.  California and Florida have been the hardest hit, and the trend is even more pronounced in these states.  In the Land of Arnold, 10.2% were late on their mortgages but current on the plastic, while only 2.7% were on the flipside.  The Sunshine State had 12.4% behind on their house payment, with 3.9% in the reverse situation.

Avalanche of Debt

Maybe they’re using a half-assed version of the Dave Ramsey Debt Snowball method - paying off the smallest debt first.  But I think they were supposed to at least make the minimum payment - which, in the case of a mortgage, is probably their largest payment.  These people need to find a balance when it comes to debt repayment.  If you’re in arrears on your mortgage payment, and relying on credit cards to pay your daily expenses, you’re probably just one straw away from breaking the camel’s back, so to speak.

I feel for these people.  Thank God I’m not in the same situation, as I paid off my mortgage years ago.  What do you think?  Would you choose to pay your credit card bill before paying your mortgage?  What’s Plan B when the bank forecloses on your house?

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