By Kathy Chu, USA TODAY Seven years in the credit-counseling business didn't prepare Ann Estes for the alarming trend she began noticing last fall: As her clients' mortgage bills became unaffordable, a growing number of them began paying their credit card bills before — and sometimes instead of — their mortgages.
"We've never seen anything like this," says Estes, who counsels clients by phone from her office in Richmond, Va. "Their homes are at risk, and they know it. But people say, 'I don't want to let my credit cards go because that's my cash flow.' "
I just recently brought our credit card under control after getting hurt by irresponsibility by myself and my wife.
Now I'm working on the HELOC. (Which I wasn't really planning on paying off until we sold the house but now I'm not sure if we can get full value for it.)
I'm lucky in that I had some funds I could tap to bring us back under control. Most people don't have that cushion. Or if they do it is their retirement money.
Middle class is becoming more and more of a misnomer IMO.
Posted by glassman on :
several months ago? Cramer suggested that people in trouble pay their credit cards before their mortgages. i was shocked. i posted it here and said i was shocked.
he explained it was primarily due to the new BKRPTCY laws passed by the GP congress and signed by Bush.
i'm beginning to wonder just how much collusion there has really been to set up the scenario we are currently in...
it appears that banks are issuing more credit cards right now because they can't find mortgage money to lend out... i have recently seen statistics that show that over half of all households spend more then they take in..
they have a good model (the Govt)...
how long do people think this can go on? surely we are in our third straight year of a negative savings rate...
if we are not already in a recession? we will be soon if this is any indication...
Posted by T e x on :
quote:Cramer suggested that people in trouble pay their credit cards before their mortgages.
That may have been in this context: If you're late on even ONE? That ONE can trigger some sort of "alert" or, better... "Happy Hour" notice that let's ALL THE OTHERS raise your interest rate.
An analogy might be: You teased me, so now you're gonna get gang-banged...