Post-recession Americans rearrange bill priorities, study finds

The recession and its hangover appear to be turning bill-paying habits upside down, according to a new study out today showing cash-strapped Americans are paying off their car loans before they pay credit card bills and make mortgage payments. It used to be that Americans would pay down their home loans first, then their credit card balances and car loans. After all, homes have been the most valuable possession for most people for decades, and nobody wanted to jeopardize that. But TransUnion, a credit information company, studied the payment patterns of 4 million Americans with at least one car loan, one credit card and a mortgage, and found a clear priority for staying current on the car loan. Among Americans who were late on payments last year, 39% were delinquent on the mortgage while current on the car loan and credit cards, and 17% were late on credit cards while current on the other two. Just 10% were late on the car loan while current on the other two. When TransUnion first did the study in 2006, staying current on the mortgage was the priority, says Ezra Becker, the company’s vice president of research and consulting. “Today, most people need a car to get to a job or to look for a job, and that has made cars a priority,” he says. There is also more leeway on the mortgage. Foreclosure can take two to three years. Cars can be repossessed 90 days after people stop paying.