Credit cards being used to pay for mortgages, survey shows

Over one million homeowners are increasing their credit card debt in order to pay their mortgages, a new survey has revealed.

Conducted by Shelter, the study found this to have occurred in the last year and the charity observed that this could lead to a rise in repossessions in 2010.

Director of policy and campaigns with the trust Kay Boycott labelled this discovery as “shocking”.

Commenting on the fact that one in 12 Londoners are taking this action, she said: “If people are already struggling to the extent that they fear losing their home, increasing credit card debt cannot be the answer.”

And MoneySavingExpert.com’s Martin Lewis suggested that those in such situations should consider seeking assistance, stating that turning to credit cards to make mortgage repayments is an error.

Chief executive of ClearDebt David Mond also spoke about this issue, calling the use of credit cards to fund mortgage payments “a slippery slope which only leads in one direction”.

“If people need to pay their mortgage by credit card, then it’s really time to wake up and face the music. By addressing their problems head on, they can enter into a debt solution plan and by doing so, often save their home,” he continued.

Furthermore, Mr Mond noted, many lenders will agree to provide more affordable and lower repayment plans to ensure they are still receiving some form of payment.

“The days of band-aiding a problem with plastic have long gone and people need to address their debt more sensibly now,” he said.

By Sarah Adie