Personal debt is reaching epic highs for the majority of Americans today. After several years spent in recession, many people simply don’t have the money to maintain the lifestyle they set up a few years ago. What is surprising is that few people are voluntarily giving up that old lifestyle and many are engaging in odd habits to shuffle around their funds to cover debts.
The Shell Game
A new study has been released that is bringing some disappointing habits to light. Not only are more consumers in debt and mortgage default than ever before, but many of them have devalued paying certain accounts over others. According to the TransUnion Payment Hierarchy Study, 9.5 percent of Americans are delinquent on the car loans, but current on their credit card payments. 39.1 percent are delinquent on the mortgages and facing foreclosure, but current on both their car loan and credit card payments.
For many, credit cards are becoming a priority while many are sitting back to let their homes and cars end up in the hands of creditors. The transfer for importance from mortgages to car loans and, ultimately, credit cards suggests that the problems experienced in the real estate market have taken quite a psychological toll on many Americans. Not only are more people viewing foreclosure as more probable than ever before many people are continuing to live out their prior lifestyle for as long as they can, even if that means taking from their mortgage payment to buy luxury or unnecessary items they desire. Of course, this isn’t the standard and there are a fair number of people who are having to live off credit cards to cover even essential living expenses these days.