Consumer Payment Card News

Weighty Decisions

New research shows that consumers with credit scores of 620 or lower are more likely to pay credit card debt before mortgage debt. This represents a significant departure from conventional behavior. Consumers with higher scores still tend to follow the historical payment pattern. The latest Experian study found that the mortgage delinquency rate for sub-prime consumers has grown at 13.2% over the past four years. Also, between 2005 and 2006, outstanding mortgage balances for sub-prime consumers increased 8.8%, while total outstanding mortgage balances grew only by 3.3%. Over the past four years, bankcard lending to sub-prime consumers has risen by 137%, and mortgage lending to sub-prime consumers grew by 58% during the same time period.

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