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More than one million householders have used credit cards to pay their mortgage or rent in the last 12 months, a new survey by Shelter reveals.

Many could find themselves facing homelessness this year because of their huge debts, especially as defaulting on credit card payments could trigger repossession in the worst case scenario. Paying secured debt with unsecured debt is simply one of the most dangerous things you can do and is a sure sign that you need mortgage advice, fast.

The survey by the charity found that 6% of those who were liable for the rent or mortgage said they used their plastic to cover monthly repayments – suggesting a national figure of more than a million people.

The charity is issuing a stark warning to people about the dangers of using credit cards which could result in the loss of their home. Credit card companies have to recover their debts and are not subject to the same rules as mortgage lenders so if you pay your mortgage and not your credit you are just as likely to possibly lose your home.

Kay Boycott, director of policy and campaigns at Shelter says: "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, says: "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."

SOURCE: Shelter, 11/01/10

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