In this economy, more people are choosing to pay their credit cards over their mortgages, according to a TransUnion study released in February. Traditionally, homeowners would pay their mortgages before anything else because they wanted to keep their homes.
These days, when so many mortgages are upside down (the mortgage balance is more than the home worth), some homeowners are simply walking away from their mortgages. As the study reveals, more homeowners are holding on to their credit cards and letting the homes go.
From a credit standpoint, I'd say pay more attention to your mortgage because a foreclosure has far-reaching effects. You'll have a waiting period to get a new home. You may even be forced to file bankruptcy to get rid of your liability for any mortgage balance left after your ex-home is sold. If your credit card gets charged-off, your credit score will be affected, but at least you'll have somewhere to live.
What do you think? Should the mortgage come before the credit card or the other way around?