Transferring debts to stave off financial disaster can be a “risky business”, according to Rob Kenley, head of credit cards at online comparison website moneysupermarket.com.
However good a person’s credit card deal might be, using money borrowed in this way to pay off mortgage arrears or any other form of debt is very unlikely bring about a stable financial situation for anyone, Mr Kenley makes clear.
“Repaying a mortgage with a credit card is a highly risky business – especially for anyone with a card on a standard interest rate of around 16 per cent and who generally only repays the minimum balance at the end of the month,” he said.
“If people do not have the means to repay their mortgage from their normal monthly income then using a credit card to make repayments could easily lead to defaulting on the outstanding mortgage or the credit card debt.”
Mr Kenley was responding to recent research from the homelessness charity Shelter that showed more than a million UK consumers are taking on credit card debt in order to pay rent or to meet the repayment demands of their mortgage providers.
The UK’s payment association Apacs recently released a guide aimed at encouraging young consumers to use credit cards in a responsible way.