When faced with financial hardship, do you keep the credit or pay the mortgage. According to Michael McAuliffe on MSNBC, paying off credit card bills before paying your mortgage is becoming a growing trend. Consumers are using their credit cards to buy food, clothing, and pay their utilities, while at the same time their home is getting closer to foreclosure. These consumers feel they are going to lose their houses anyway, but is that the smart thing to do? After all, losing your home to foreclosure will have a greater negative affect on your credit. Watch the video and see what a recent survey by Capital One found.
Credit card companies have pretty much had a license to print money for a long time. And while associations like Consumers’ Union, publisher of Consumer Reports, have long spoken out against some of the industry’s most questionable practices, nothing has changed much in at least ten years.
Enter the election year and the soft economy. Finally the lawmakers are feeling the heat — and if they have to toss credit card companies into the fryer to keep themselves out they will do it! Naturally, banks and credit companies are gearing up to fight hard. Lobbyists are already spinning out claims that regulation will cost consumers more and make less credit available. It’s pretty funny, actually. The ABA claims that credit card issuers are better-regulated and more consumer friendly than mortgage lenders and so don’t deserve to have the spotlight turned on them. “Credit cards are a highly regulated industry,” Ken Clayton, counsel for the ABA said. “The parallel doesn’t work.”
