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Are Ohio consumers choosing to pay credit cards over mortgages?

In the last post, this blog discussed the general trend in consumer's reliance on credit cards when making purchases. In recent years, overall credit card debt has seen a decline. More consumers are expected to use their credit cards during this holiday season, but that may not necessarily alter the trend in declining credit card debt, according to a recent report from TransUnion.

The financial services and risk management firm suggests the decline in credit card debt is the result, at least in part, in the way consumers are prioritizing their household debt. TransUnion says more and more Americans are letting their mortgage payments slip, while servicing their credit card debt. While it may seem intuitive that the change in behavior is related to the recent foreclosure crisis and market value of homes, some experts are suggesting that consumers still place a high value on home ownership.

A foreclosure expert at Georgia Tech says many consumers are just facing a current sort of financial reality. Consumers are relying on their credit cards as a financial lifeline and simply servicing the debt in order to keep that lifeline alive, he says. The city planning professor says that some homeowners are accepting the reality of foreclosure and choosing to maintain their current credit cards.

The director of research and consulting at TransUnion seems to agree, saying some consumers are making the tough choices between paying the mortgage and paying credit cards in the tough economy. He says, "Consumers are protecting their credit cards. It gives them financial flexibility."

Debt issues can place a strain on any household budget. For many Ohio residents, one option in finding meaningful debt relief is under the nation's bankruptcy laws. Cincinnati bankruptcy lawyers know that a chapter 7 or chapter 13 bankruptcy petition can often provide debtors suffering through the economy with a fresh start upon completion of the bankruptcy proceeding.

Source: Atlanta Journal Constitution, "More consumers choosing to pay credit cards over mortgages," Christopher Quinn, Dec. 7, 2011

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