Wednesday, 16 February 2011

More than 2 million people have used credit cards to pay their mortgage or rent

Research carried out by Shelter, the housing charity, showed the number of people who’re using credit cards to pay their rent has increased by 50% in a year. With the average credit card interest rate now standing at over 16% this can often exacerbate the tenant’s debts, and suggests that keeping a roof over their head has become a daily struggle for millions across the country.

Lots of tenants and homeowners are aware of the possibility they could lose their home, but when they’re faced with the choice of either making a late payment, or using a credit card, it’s a simple decision. But, in today’s economic climate this could lead to problems down the line, especially if their credit has run dry.

With an increased threat of unemployment and rising interest rates, Shelter are warning that many people will be starting 2011 with the threat of homelessness hanging over them. Credit cards may ease your immediate problems but can create greater problems in the long run. The charity is urging these people now relying on credit to keep their home to seek advice urgently, and the charity provides free advice on debt and housing issues.

As housing and living costs continue to increase, the research also highlights some of the risks people are taking as they forgo essential items to stay afloat, such as their home insurance.

According to the findings, more than a fifth of the population (22%) don’t think having home contents insurance is important, although nearly 80% of people say they’d be unable to afford to replace expensive items without it.

Lee Mooney, Head of Home Insurance at The Co-operative Insurance, said: “The results of our research with Shelter highlight the extent to which people are now feeling the pinch and show that a large number of people are being forced to spend more money than they can afford.

“Although times are tight and the vast majority of people don’t have spare cash, it’s important people prioritise what they need above what they want in the year ahead. It’s worrying to see that such a high proportion of people don’t think having home insurance is important, as without it they could be left open to serious risk and further unaffordable expenditure in the long run.”

If you are a Landlord - Tenant - Homeowner remember "Insurance is one essential you can't afford to be without today"

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