A fifth of Britons pay household bills by credit card

As many as one in five households in the UK are using credit cards to pay their domestic bills.

Research by comparison site TotallyMoney.com found some 21 per cent of respondents had to resort to this, with 11 per cent – the equivalent of 3.4 million people – using their plastic to cover gas and electricity charges. 

Over half of these stated they had to use their cards as a result of recent price rises, prompting fears many more may be forced to rely on credit as several fixed-rate tariffs are due to come to an end shortly. Meanwhile, the study showed 6.5 per cent used plastic to pay for their council tax, while 4.3 per cent did the same for water bills.

The survey warned by opting to pay for their obligations using credit cards, consumers are actually paying more than they need to. This is because many organisations levy charges of around two per cent for payments made in this way. The study found this could add around £29 to the average annual council tax bill, £24 to energy prices and £8 for water.

In addition, the cost could be even greater for those who do not subsequently pay off their credit card bills in time, as they forget to consider potential interest charges. The report stated this could risk pushing struggling families even further into debt. 

Will Becker, chief executive at TotallyMoney, commented: "In effect, paying bills by credit card is a self-inflicted price hike as the addition of surcharges are just adding to household costs. This is an even bigger issue for those who cannot pay their credit card bill in full at the end of the month."

The study also found it was not just utility bills consumers were paying on their credit cards. Some five per cent of respondents admitted they used plastic to cover their rent, while four per cent of homeowners did the same to make instalments on their mortgages. 

By Amy White