TransUnion recently released a study that showed the number of people paying their credit cards before mortgage was increasing. There were more people falling behind on mortgage payments than on credit cards. With unemployment reaching record highs, more and more people are having trouble paying all their bills, credit cards and mortgages included. But, if you count of all the days that one has to pay, is the credit card payment really more important than the mortgage payment.
If you have a cash shortage, a credit card payment is easier to pay than a mortgage payment. That’s because the minimum credit card payment can be as low as $15 in some cases. A mortgage payment, on the other hand, could be one thousand dollars or more. It’s much easier to come up with $15, than $1,000.
Over time, credit card companies have made life hard for consumers who miss their credit card payment. The penalties of a late credit card payment are swift and hefty. If you miss your credit card payment any number of things could happen: you’ll probably be charged a late fee as much as $39, your minimum payment will more than double on the next billing statement, your interest rate could go up, you’ll get a late payment notification on your credit report, and your credit score will go down.
Many people would choose to pay their credit card over their mortgage because credit card companies have a reputation for wrecking your credit history if you miss a credit card payment. Late mortgage payments have their own consequences.
If you don’t pay your mortgage on time, you’ll also pay a late fee and have to make a double payment the next month. Even worse, missing a mortgage payment puts you at risk of foreclosure, which will go on your credit report, hurt your credit score. Foreclosure will keep you from buying another home for at least three years, even if you have the best local mortgage broker Kelowna, and more often you’ll have to wait five years after foreclosure to get a new home.
For most people, a home is the most valuable asset they’ll ever own. Keeping your mortgage payment current is important to make sure you keep that asset. If you skip out on your credit card payment, the credit card company can only wreck your credit score. Missing your mortgage payment can lead to homelessness. If you have to choose between the two payments, do everything you can to pay your mortgage.