Underwater homeowners are voting with their wallets, and paper (i.e., the house deed) is losing out to plastic:

In the past, strapped consumers typically would let their credit cards slide and make sure their mortgages were covered, said Sean Reardon, the [Trans Union study's] author and a consultant at the Chicago-based credit bureau. But those priorities flipped in the first quarter of 2008, according to the study, and the trend has been picking up steam…

Why the change? A “perfect storm” of deteriorating housing prices and rising unemployment is likely the reason, Reardon said. It’s much easier for consumers to walk away from mortgage payments when their homes aren’t building equity, he said, than to neglect their credit cards when that may be the only way they’re covering daily expenses.

Preserving the pocket-sized line of credit over the four-bedroom spread really underlines the upside-down valuations that have taken hold. At least national spending levels will remain high — even if there’s no place to store all the purchases.