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2 million Brits using credit cards to pay their mortgage

By Dominic Welling dominic.welling@consumerchoices.co.uk

Millions of Brits are only able to keep a roof over their heads by making their rent or mortgage payments using their credit cards.

More than 2 million people struggling to meet housing costs are using their credit card to pay their mortgage or rent, new research from housing charity Shelter has found.

The figure has gone up almost 50% since Shelter did the same research the previous year and the charity has warned that many of these people could be facing the threat of homelessness this year as a result.

Campbell Robb, chief executive of Shelter, said: “This is a totally unsustainable situation and one which we fear could see thousands more families pushed into the spiral of debt, eviction or repossession and ultimately homelessness.”

In very severe cases, defaulting on credit card payments can lead to repossession. In addition, other small things such as a bout of illness, an increase in rent or a drop in income, could all push people into spiral of debt and arrears that could lead to the loss of their home.

The survey was conducted in August last year among 2,202 Brits.

When asked if they had borrowed money on their credit card to pay their rent or mortgage in the last 12 months, 6% of respondents said yes. This is compared with just 4% in November 2009, suggesting a national figure of more than 2 million people.

Chris Eagle, director of marketing at Creditchoices.co.uk, said: “Using credit cards is the worst possible way to pay your rent or mortgage repayments - it is simply robbing Peter to pay Paul.

“With the average credit card interest rate now standing at more than 16% it is the worst possible course of action.

“If you find yourself in this situation, you should seek advice from Shelter or the Citizens Advice Bureau as soon as possible or risk losing your home.”