A credit card is something that most people in the past have used because it offers convenience, ease, security, and a fallback in case of financial emergencies. Many people use a credit card because they can earn rewards by spending on it, and others simply like the convenience and security of not having to carry cash around. However, since borrowing costs have been hiked up, household finances have become more strained due to higher living costs, and the global credit crunch has made affordable borrowing more difficult, the credit card has become a tool that some people have started to rely heavily on rather than a tool for increased convenience and ease.

Worryingly more and more people are finding that their household finances are now so overstretched that they are having to use their credit cards to pay for essential items, such as food and clothing, and even to pay bills and make the mortgage repayments, which is resulting in an increase in the number of people likely to fall into spiralling credit card debt. In the past year it is thought that over four million households have used their credit card to make at least one mortgage repayment, and given the interest rate and other charges that come with credit card use this is a worrying figure.

Industry officials have said that it is understandable that some households may have to rely on their credit card more in the current financial climate where many cannot make ends meet. However, they have also expressed concern about those that are using their credit cards to make essential purchases, and to pay bills and mortgage or rent, on a regular basis. This is a strong indicator of spiralling debt levels, and consumers who are in this situation are urged to take action, such as speaking to their lenders regarding their financial problems or speaking to a debt counsellor about any unsecured debts.

One industry official from the housing charity Shelter stated: ‘Our report shows just how difficult it is for ordinary people to cope with spiralling housing costs, and how desperately unaffordable housing has become. People are going to extraordinary lengths to ensure they pay their rent or mortgage, but the affects of stress or depression, having to sell possessions or deprive the kids of treats can be devastating to family life.’

The government said that it is taking steps to try and help those struggling with their finances, and the Housing Minister, Caroline Flint, recently said: ‘We are taking action to support families who may be facing difficulty because of current market conditions, with £9m more for face to face debt advice, and free legal advice to all households at risk of repossession.’

Officials have added that there are a number of steps that consumers may be able to take to reduce their outgoings depending on their financial circumstances, and have strongly advised those who are really struggling to speak to a debt professional as early on as possible before the problem gets out of control.

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