Debt alert as credit cards used to pay mortgages

Published on Wednesday 17 October 2007 11:58

WARNINGS have been sounded over a fresh debt crisis after it emerged that 40,000 households in Scotland use credit cards to pay their mortgages.

In a survey carried out by housing charity Shelter, almost three per cent of Scots admitted resorting to their credit card to pay for their home in the past 12 months.

Desperation to stay on the housing ladder, particularly among young people, was cited as one of the reasons for the statistics.

Shelter Scotland's director, Archie Stoddart, reportedly said: "The number of people hit by the credit crunch, interest rate hikes and unaffordable housing costs is rapidly rising. Ordinary people are being forced to seek more risky and expensive ways to stave off the threat of eviction and repossession.

"To ensure people have real choices about their housing, we must increase the stock of affordable rented homes in Scotland."

In July, a report for the Scottish Executive said Edinburgh's affordable housing crisis was much worse than thought.

It revealed as many as 15,000 affordable units are needed over the next decade.

Most credit card companies charge interest up to 50 per cent higher than that of the average mortgage.