Reed Law Firm, P.A. is a federally designated debt relief agency. We proudly help people file for bankruptcy relief under the U.S. Bankruptcy Code.
image description
Giving You Hope For a Debt-Free Future

SOUTH CAROLINA
BANKRUPTCY ATTORNEY

According to new survey, auto loans trump credit card debt

South Carolina residents may be interested in a new study by Transunion that found American consumers tend to pay their car notes before credit card debt and mortgages. While consumers place their credit bills as a top priority, transportation tends to trump everything else. Although auto loans normally have significantly lower interest rates than credit bills, credit card debt loses to the importance of having an automobile to ensure Americans can get to and from work.

The researchers who conducted the study believe that while Americans can cope with a late mortgage payment, paying the auto loan late can place them into an area of greater immediate financial concern.

This study came as a surprise to researchers who apparently believed that mortgages and credit debt would receive preference over auto loans. But according to the study, this is definitely not the case. Unemployment and plunging real estate values are likely attributable to this change in pattern, and researchers have a couple of ideas as to why consumers would choose to pay their auto debts over others.

Not having transportation can mean not having a job. If money is not made, nothing can be paid so ensuring auto loans are paid on time every time means that money will likely continue coming in from employment to pay for everything else. Consumers tend to believe that a repossession of a car is much worse than losing a credit card. Auto loans are not revolving loans and the consequences of not paying are more severe than a late credit card payment. Americans also tend to believe that their cars currently hold more equity than their homes in this still-stagnant economy and want to ensure the equity remains by making on-time payments.

While this change in habits is interesting, it makes sense to those who see employment as the end-all for paying other bills. Due to a poor economy, Americans are seeing more value in their vehicles in anything else, which causes them to place their auto loans on a pedestal and ensure those loans are always paid first. But even with that emphasis, some consumers have still watched helplessly as their debt has spiraled through the roof, and for some of those individuals, bankruptcy protection may offer immediate relief on the road to a return to financial stability.

Source: MainStreet, "Car Loans Trump Credit Card Payments, Study Finds," Brian O'Connell, April 2, 2012

No Comments

Leave a comment
Comment Information

Contact Us

For more information or to schedule an appointment with an experienced lawyer regarding a bankruptcy filing, please contact us.

image description

COLUMBIA OFFICE
220 Stoneridge Drive,
Suite 301
Columbia, SC 29210
Phone: 803-807-2565
Fax: 803-726-4887
Email | Map & Directions

FLORENCE OFFICE
1807 West Evans Street,
Suite B
Florence, SC 29501
Phone: 843-679-0077
Fax: 843-679-0667
Email | Map & Directions

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

image description

Reed Law Firm, P.A.
220 Stoneridge Drive,
Suite 301

Columbia, SC 29210

Phone: 803-726-4888
Fax: 803-726-4887
Columbia Law Office Map

Reed Law Firm, P.A.
1807 West Evans Street,
Suite B

Florence, SC 29501

Phone: 843-679-0077
Fax: 843-679-0667
Florence Law Office Map

Reed office

‚Äč