Homeowners Using Credit Cards To Make Loan Repayments
In the aftermath of the credit crunch and recession, a growing number of individuals have dramatically altered their outlook when it comes to their finances, repaying additional amounts off their personal loan and credit card debts, rather than borrowing extra money.
Despite this, a new survey from the housing charity Shelter has revealed that somewhere in the region of one million home owners and tenants have been forced to make their monthly home owner loan repayment, or rent payment with a credit card at some time over the last twelve months.
The survey asked people if they had made a home owner loan repayment using a credit card in the last twelve months and six per cent of those people interviewed said that this was the case. Extrapolated to a national level, this means that around one million people have paid their home owner loan or mortgage in this way.
Although credit cards are an unsecured form of credit, Shelter have warned that the rules governing cards are not the same as those for home owner loans and that the card company is able to obtain a charging order against the borrowers property in the event of a default on the card, which could still lead to repossession in a worst case scenario.
Kay Boycott for Shelter 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 fear losing their home, increasing credit card debt cannot be the answer. 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.”
