Is renting bad for your finances or are renters just bad with their finances?

A new study about America's credit card debt from policy research and advocacy groups Demos, the Center for Responsible Lending, and the AARP shows that the most debt-troubled consumers are those who don't own their homes, even though their credit card balances are lower than those who are their own landlords ($6,880 vs. $10,296).

  • Less than one-third of homeowners reported using credit cards to cover basic living expenses. But 45% of renters whip out the plastic for groceries, bills, rent, and other must-pay expenses.
  • More than half missed at least one credit card payment in the past year and 26% missed three or more payments.
  • Renters reported fewer financial resources at their disposal than homeowners, and thus were forced to ask family (35% vs. 14%) and pawn shops (12% vs. 3%) for loans to cover unexpected expenses more frequently than non-renters.

The fact that renters have a hard time dealing with debt than homeowners could be attributed to their having less disposable income -- a fact borne out in the survey results. Renters tended to be younger and have less income and savings. Certainly it takes some amount of financial stability to get approved for a mortgage. And the home is often a safety net for debt-strapped borrowers who dip into their equity to pay off higher-interest-rate credit card debt.

Indeed, the new housewarming plaque could read: "Home Is Where the Loan Is." But this strategy of trading unsecured debt for secured debt to snag a low interest rate and tax write-off can turn into a dangerous financial trap, particularly for those with so-called "extreme mortgages."

To stereotype young credit card borrowers as irresponsible with money goes too far. (Although it's hard not to wonder who's behind growing same-store sales at hipster stores like Urban Outfitters (NASDAQ:URBN) and Abercrombie & Fitch (NYSE:ANF).) And there's no reason to rush out and buy a home to try to improve your credit score. The more important data point is probably income. It's not hard to see the connection between that and debt hardship.

Dayana Yochim owns none of the companies in this article, but she shops at one. (Feel free to send her Urban Outfitters gift certificates -- they're just her size!) The Fool's disclosure policy is one-size-fits-all.