by Keith Richmond
More than one million householders have resorted to using a credit card to pay their monthly mortgage or rent, according to a new report from the homeless charity Shelter.
Despite new restrictions on credit and reports of people trying to pay off personal debt since the credit crunch struck, the report reveals a disturbing picture of people taking desperate measures to keep a roof above their heads.
Kay Boycott, Shelter’s director of policy and campaigns, 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.”
The highest proportion of those paying their rent or mortgage on plastic were working class – 8 per cent of those in the C2DE social grouping – but the poll also shows that middle and upper class households (in the ABC1 category) are falling victim, too, with 4 per cent of them using credit cards this way.
The charity fears that many could find themselves facing homelessness later this year because of accumulating debts – especially as defaulting on credit card payments can lead to homes being repossessed.
Shelter is issuing a stark warning to people about the dangers of using credit cards. Ms Boycott said: “Credit card companies have to recover their debts and 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.
“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.”
She added: “Shelter has a network of advice services across the country 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.”
