Credit cards not a long-term mortgage solution
By UK CreditCards.com
The news that many homeowners are turning to their credit cards to cover mortgage and rent costs is "terrifying", according to an advice organisation.
Chris Jenkins, co-owner of the Homeowners Advice Centre, warned that although credit cards can be a short-term way to cover debts, using them over a longer period could increase an individual's financial problems.
A report from housing charity Shelter revealed in January that more than 1 million people have needed to cover housing costs with their credit card in the past year.
Mr Jenkins pointed out that relying on credit cards until they have reached their limit could place homeowners under a greater financial burden as higher balances mean higher interest repayments.
He added that this approach will not tackle the "root cause" of "monthly outgoings exceeding incomings leading to an inability to afford vital monthly bills."
"Rent and mortgage payments are a continuous monthly outgoing that needs to be accounted for each month and if this is not possible then cutbacks need to be made in other areas," he explained.
Published: 21 January 2010
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