TransUnion 2010 Payment Hierarchy Study Commentary

Comment by Frank Rauscher on February 6, 2010 at 12:17pm

Consumers are showing "street smarts" -Good for them. They know that if they miss a payment on their credit cards, they will be sent to "financial hell" including a 29,99% interest rate and little chance of getting another card if their account is closed. Think about financial hell - they will struggle to pay the minimum payment due and it will take almost 30 years to amortize the card balance even if they do not actively revolve the card. Whereas they may be hoping for mortgage relief (there is always hope) but if it does not arrive, they appear to be reconciled to moving to other accomodations with the dream of owning a nice house shattered. But they realize that pouring money into an asset that is signifcantly worth less than the mortgage may not be street smart and articles are being written about the moral value of keeping up payments to honor their word may not be immoral in the light of the fact that so many homemowners were preyed upon and abused by Wall Street. They may be hoping for a short sale, etc with removed liability or legislation to help them in the future.
This is good info for credit administrators to think about. Thanks for the post.

Comment