A survey has estimated that over a million households have used a credit card to pay for their mortgage or rent over the past year. This counts for 6% of all households, and the survey was based on a sample of just over 2,000 people.
Shelter, the homeless charity, conducted the research, which also concluded that those most likely to resort to the plastic to keep a roof over their heads were the “working class”:
The highest proportion of those who pay their rent or mortgage through credit card were from working class professions (8% of those in the C2DE social grouping), but the poll also showed that middle/upper class (ABC1 category) are falling victim, with 4% of respondents saying they use credit cards in this way.
Those in London were also more likely to use the flexible friend, with 1 in 12 in the capital admitting they’ve used credit to pay for their mortgage or rent.
Whilst the number of repossessions have failed to reach the doomsday scenario some were expecting (and this is probably down to low interest rates as much as its due to lenders being more lenient), these figures are extremely worrying.
Whilst it might seem like a quick solution, it can have massive repercussions and lead to massive amounts of debt unless you clear the balance each month, which, let’s face it, is probably unlikely if you have no other way to pay the mortgage in the first place. In the worst case scenario, homeowners could actually find their home repossessed by the credit card companies looking to get their money back.
At the first sign of trouble with paying your mortgage, you should contact your lender and talk to them about your situation – they may have some options available to you, especially if you’ve always been a great borrower and managed to pay your mortgage on time.
You could also try talking to the Citizen’s Advice Bureau, as well as Shelter themselves.
For more thoughts on paying your mortgage, read our previous post on struggling to pay your mortgage.
Would you consider or have you used your credit card to pay for your mortgage? Let us know in the comments below.
photo credit: Ciaran McGuiggan