More paying mortgage using credit cards

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by Kay Murchie

According to a report published by the housing charity, Shelter, over one million UK homeowners have used high-interest credit cards to pay their mortgage or rent payments during the last 12 months.

The report was carried out by YouGov for Shelter following the Northern Rock crisis and questioned 2,000 households. 6% of those questioned have used plastic to pay mortgage or rent payments, the equivalent of one million households.

The research also showed that 7.5% of homeowners aged between 18 and 24 confessed to using a credit card to keep a roof over their heads.

A spokesperson for Shelter said that ordinary people are desperate and are forced to look at more risky and expensive ways to avoid eviction and repossession. Mortgage repayments are unlikely to incur more than 10% interest whereas credit card borrowing comes with higher interest rates – usually 20%.

Debt experts are holding lenders responsible for letting customers borrow too much money. A spokesperson for Community Money Advice said this method is ok so long as you pay off the balance each month but many don’t, they just pay the minimum. Consequently, debt becomes out of control and the credit will simply run out.

A spokesperson for the Consumer Credit Counselling Service warned that this problem could get worse when fixed-rate deals come to an end adding hundreds of pounds more to housing costs.