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"Many paying mortgage and bills with credit cards"

By admin | December 20th, 2008 | Credit Cards

Over the past year, with inflation soaring and the cost of living rocketing, many households have experienced difficulties when it comes to meeting their mortgage repayments, paying their rent, or paying their bills.

In order to avoid falling behind with such payments, it appears that many have been resorting to using money off their credit cards in order to make these payments, with recent research suggesting that over one million consumers have used their credit cards to pay mortgage or rent, and make bill payments.

Many have been withdrawing cash on their credit cards in order to make these payments, and officials have said that this is a very expensive way of making payments, as it means clocking up interest even on cards that are otherwise interest free as well as being charged high fees and charges for taking cash out on the cards. What’s more the interest rates and charges on cash withdrawals and transactions made on credit cards has been rising over the past year, making the process even more costly for consumers.

One industry official said that it was wrong of lenders to financially penalise vulnerable consumers in this way, particularly given the current difficult financial climate.

She said: ‘People who use a credit card to withdraw cash may already be struggling under the burden of debt, and are forced to resort to this method of borrowing to make ends meet. They can ill afford to pay the exorbitant rates of interest that most lenders are now charging them.’

It is also thought by many officials that a further 1.7 million consumers will turn to their credit cards in the weeks to come to fund the expense of the festive season, with fewer people now having available cash to spend on Christmas.

Tags: Credit Cards, mortgage payments

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