Shelter: Mortgages being paid by credit card
Shelter: Mortgages being paid by credit card
Monday 11th January 2010
A homeless charity has warned more than one million householders are using credit cards to pay their mortgage or rent.Shelter revealed the figures in a survey today, calling its findings a "disturbing picture" on how many Brits take desperate measures to keep a roof over their heads.
Moneysavingexpert.com's Martin Lewis warned householders paying their rent or mortgage in this way could store up "mammoth financial problems".
The exclusive YouGov poll for the charity's Roof magazine found the highest proportion of those who pay their rent or mortgage through credit card were from working class professions, but the poll also showed that middle/upper class are also falling victim, with four per cent of respondents saying they use credit cards in this way.
The survey asked if respondents had paid their rent or mortgage by credit card in the past 12 months; six per cent of those who were liable for the rent or mortgage said 'yes' - suggesting a national figure of more than a million people.
Mr Lewis said: "Mortgages are a debt, credit cards are a debt. For all but the seriously financially savvy, using credit cards to pay rent or mortgages is a mistake that can store up mammoth financial problems for the future. If you can't afford to pay your housing costs lumping up the borrowing is never the answer - far better is to seek help as soon as possible and start managing the problem.
"It's great to see housing charity Shelter adding to the weight of non-profit debt counselling help for those in crisis; and I would urge anyone worrying about home related debt problems to get in touch with them - it should stop a few sleepless nights."
Today Shelter is issuing a "stark warning" to people about the dangers of using credit cards which could result in the loss of their home. Credit card companies have to recover their debts and are not subject to the same rules as mortgage lenders.
"If people are already struggling to the extent that they fear losing their home, increasing credit card debt cannot be the answer," Kay Boycott, director of policy and campaigns at Shelter said.
The study also revealed that in the property rich capital, one in 12 Londoners resort to plastic to pay their mortgage or rent.
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