More than a million UK householders have used a credit card to pay their mortgage or rent in the last 12 months, a new survey by housing charity Shelter reveals today.
Despite media reports of many people paying off personal debt, a YouGov poll for the charity’s Roof magazine reveals a worrying picture of over a million people taking desperate measures with credit cards to keep a roof over their head.
One of the biggest shocks is that one in 12 Londoners are resorting to plastic to pay their mortgage or rent, a much higher proportion than the national average.
The charity is urging anyone using credit cards in this way to get in touch with the local Shelter advice service today and get advice before their situation gets any worse.
Mortgage debt problem crosses social boundaries
The highest proportion of those who pay their rent or mortgage using a credit card were from working class professions (8% of those in the C2DE social grouping), but the poll also showed that the middle and upper classes are also falling victim, with 4% of respondents in the ABC1 social category saying they use credit cards in this way.
Borrowers facing homelessness as a result
The charity warned that many borrowers could find themselves facing homelessness this year because of their huge debts, especially as defaulting on credit card payments could trigger repossession in the worst case scenario.
Credit card companies are not subject to the same rules as mortgage lenders. Once they obtain a charging order on people’s property, credit card companies can go back to the court for a possession order to force a sale to recover the debt.
Kay Boycott, director of policy and campaigns at Shelter said: ‘This is a shocking discovery, that over a million households in Britain are in such desperate circumstances that they need to borrow money on credit cards to pay for basic housing costs. If people are already struggling to the extent that they fear losing their home, increasing credit card debt cannot be the answer.
‘It is absolutely vital that every single person using credit cards in this way seeks advice urgently to get the help they need to ensure they don’t lose their home. Shelter has a network of advice services across the country who are ready to give free advice on a range of subjects including debt and housing issues so we would urge anyone struggling to get in touch today. The sooner they seek help, the more options are available.’
Which? supports Shelter’s advice to seek independent help
Martyn Saville, Which? principal researcher, commented: ‘These new figures from Shelter paint a worrying picture of many consumers struggling to pay their mortgage or rent. I strongly endorse Shelter’s call to action – if you’re struggling with debt, it’s vital to seek independent, free advice, whether this comes from Shelter itself or another free advice organisation such as Citizens Advice, National Debtline or the Consumer Credit Counselling Service (CCCS).
‘If you’re using one form of debt, such a credit card, to pay off other debts, including your mortgage, alarm bells should be ringing. Taking independent advice now could help you clear your debts quicker and, at the most serious end of the scale, prevent you losing your home.’
For more advice, read the free Which? guide to dealing with debt.
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