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Survey Credit concerns not limited to mortgages
CHANTILLY, Va. (12/27/07)--If there were ever a time your members needed help with setting their budget priorities, it's now. Yet another nationwide survey documents that credit concerns for consumer households aren't limited to mortgages. The mortgage sector's woes are spilling over into the broader economy and affecting consumers' ability to pay all their bills, according to a survey of more than 1,000 U.S. households by Online Resources Corp. Americans increasingly are being forced to prioritize among their bills by creating a "delinquency budget" to determine which bills get paid. While mortgage bills are the bill households are most likely to pay, businesses across other industries are facing a decreasing share of that delinquency budget. The survey found:
* One out of four households reported they were delinquent on at least one bill by at least 30 days; * If forced to choose between which bills to pay, 98% would likely pay the mortgage first; * Credit card, phone, healthcare, utility and loan payments are among the bills least likely to be paid.
Online Resources, a provider of web-based financial services, also surveyed clients--including credit unions--from its biller end-point network. Most respondents reported a negative impact already from the consumer credit crunch. Only 2% of the companies surveyed expect it to be easier to collect payments in 2008, and 84% expect to spend more on collections efforts. Both surveys point to a disconnect between billers and consumers about how consumers prefer to resolve their delinquencies. Most consumers surveyed prefer to make delinquent payments over the web because of its convenient and nonconfrontational nature. However, only 8% of billers offer online collections services beyond accepting payments that would allow consumers to resolve the delinquency. "Today's challenging credit environment could pose a serious risk to companies in all recurring-bill industries and their ability to carve out a priority spot in consumers' budgets," said Matthew P. Lawlor, chairman/CEO of Online Resources. "Billers who provide consumers with more options to resolve their delinquencies will have a distinct advantage in competing to win a priority share of the delinquency budget and also retain valuable consumer relationships."
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