Mortgage paid with a credit card
Mortgage paid with a credit card
A survey carried out by the housing and homelessness charity has revealed the shocking fact that more than 1 million homeowners have used a credit card to pay for their mortgage or rent in the past 12 months.
The respondents of the survey were asked if they paid their rent or mortgage by credit card in the past 12 months. 6% of those who were responsible for their rent or mortgage said yes – which suggests nationally more than a million people have done so.
Cash withdrawals in order to make a mortgage payment have a much higher interest rate than using the card online or in a shop. A typical charge is 2% of the withdrawal amount or £5 (whichever is the highest), and the interest charges start immediately.
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.’
Martin Lewis of MoneySavingExpert.com, said: ‘Mortgages are a debt, credit cards are a debt. For all but the seriously financially savvy, using credit cards to pay rent or mortgages is a mistake that can store up mammoth financial problems for the future. If you can’t afford to pay your housing costs lumping up the borrowing is never the answer – far better is to seek help as soon as possible and start managing the problem.
‘It’s great to see housing charity Shelter adding to the weight of non-profit debt counselling help for those in crisis; and I would urge anyone worrying about home-related debt problems to get in touch with them - it should stop a few sleepless nights.’
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