6% of Britons used plastic for home payments

By UK CreditCards.com

A growing number of people struggling to make their mortgage or rent payments are turning to their credit cards.


According to new research by housing and homelessness charity Shelter, more than 2 million people have used their credit cards to meet their housing costs during the past 12 months -- a far higher number than previously.

6% using credit cards to keep their home
A poll commissioned by Shelter highlight the extent of financial difficulties faced by many Britons in recent months. YouGov questioned 2,234 people in the UK and found that 6% of respondents had borrowed money on their credit card in order to pay their rent or mortgage during the previous 12 months. This compares with just 4% of respondents to a similar poll conducted in November 2009, and suggests that more than 2 million people have recently resorted to using their credit card for this purpose.

Campbell Robb, chief executive of Shelter, said that the findings underline the "daily struggle" that millions of people face to keep their home. "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," he warned.

Mr Robb explained that, in severe cases, people who default on their credit card payments could face the prospect of repossession. He observed: "Just one single thing, like a bout of illness, a rent increase or drop in income, is all that's needed to push people into a spiral of debt and arrears that can lead to the loss of their home."

Reluctance to admit problems
Many homeowners are reluctant to admit they are having financial difficulties, according to Catherine Hearnden, director of MyMortgageDirect. Responding to the Shelter research, Ms Hearnden said that people are often frightened that they may lose their house if they admit they cannot pay their mortgage. She explained: "A lot of people bury their heads in the sand and think that if they don't say anything then the lender won't notice."

Struggling borrowers urged to seek help
However, Shelter has advised people to face up to their problems and seek help, rather than resorting to credit cards. Vanessa Dixon, the charity's north-west regional manager, observed: "Using credit cards to pay the rent or mortgage is simply robbing Peter to pay Paul. Already someone faces the nightmare of losing their home every two minutes, and we would urge every single one of these people now relying on credit to keep their home to seek advice urgently."

See related: Credit cards not a long-term mortgage solution 

Published: 13 January 2011