Apparent "oops"

In my previous post I wrote "For borrowers in a pinch, mortgage payments probably take priority over credit card payments." Somebody called my attention to a study by Experian that seems to contradict my assertion. The credit-reporting agency finds that people with bad credit are less likely to skip a credit card payment than a mortgage payment. I couldn't find the study online, but here's a review.

But if you interpret the finding by Experian carefully, you'll see that the contradiction is only apparent, and I already touched on this argument in my post. Borrowers have the option to make small payments on their credit card debt. Because minimum payments are minute and late payment fees hefty, borrowers have the incentive and the ability to "not skip" card payments. In a way, however, making just the minimum payment is skipping your card payment. Mortgage amortization schemes, on the other hand, are seldom flexible, so people either make their monthly payments in full, or not at all.