Credit card bills are first to go unpaid, Fed finds

In recession, credit cards were paid first because they were a financial lifeline

Sabrina Karl
Personal Finance Writer
Data whiz and visual storyteller




During the depths of the recession, Americans struggling with monthly bills started to shift their bill-paying habits. Whereas mortgage payments had previously been sacrosanct, credit card payments were getting new top-level priority. 

That’s because some had come to think of their mortgage as a lost cause, while keeping a credit card in good standing was their lifeline for day-to-day expenses. 

According to the Federal Reserve Board’s latest Survey of Household Economics and Decisionmaking, however, Americans’ collective bill-paying hierarchy appears to have fully reverted to its pre-recession norm, with credit card payments back to being last in line. 

The Fed found that of those surveyed, 22 percent expected they would forgo payment on some of their bills during the month of the survey. Within this group, approximately one-fifth of Americans, almost half (49 percent) said their credit card would go unpaid or only partially unpaid that month. 

Meanwhile, the percent of payment-deferring respondents who said their mortgage bill would go unpaid numbered only 17 percent, about a third of those who said they’d forgo their full credit card payment. 

In between credit cards and mortgages were phone and utility bills, which 27 and 26 percent, respectively, said they would leave at least partially unpaid that month. 

Though auto and student loans might appear to be receiving higher priority than mortgage payments, at 14 and 10 percent non-payment rates, it’s important to note that a smaller share of the U.S. population has these obligations in the first place, so fewer consumers would report deferring them. 

The Federal Reserve Board has conducted this survey annually for five years, with the latest findings detailed in its Report on the Economic Well-Being of U.S. Households in 2017. Including responses from over 12,000 U.S. adults, the census-representative findings were released in late May 2018.

See related: How financial well-being and physical health are linked, More infographics


Join the discussion
We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.




Weekly newsletter
Get the latest news, advice, articles and tips delivered to your inbox. It's FREE.


Updated: 09-25-2018