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"2.6Million Britons Used Cash Taken Out On A Credit Card To Pay Their Mortgage Or Rent Last Year"

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http://www.dailymail.co.uk/news/article-1344525/Millions-using-credit-cards-pay-mortgages.html

Around 2.6million Britons used cash taken out on a credit card to pay their mortgage or rent last year. A report by housing charity Shelter said many households faced a 'daily struggle' to find the money to keep a roof over their heads. The findings highlight the financial crisis facing families squeezed by a toxic combination of tax rises, poor pay rises and soaring household bills.

Experts fear the crisis will deepen this year as the Bank of England is widely expected to start raising the base rate from its historic low of 0.5 per cent.

For millions of families, who are already struggling to pay their mortgage, a rate hike could tip them over the edge as mortgage repayments jump. Campbell Robb, chief executive of Shelter, said: ‘This is a totally unsustainable situation.

‘It is one which we fear could see thousands more families pushed into the spiral of debt, eviction or repossession and ultimately homelessness.’

The number of homeowners relying on their credit card has increased sharply over the last year, according to Shelter, which has conducted the research for each of the last three years.

During the recession in 2008 and 2009, it found four per cent of households were affected. In 2010, it jumped to six per cent. It said victims realise they cannot afford to pay their mortgage or rent as the payment date approaches, and use their credit card to take out cash which they deposit in their bank account.

But cash withdrawals on credit cards are one of the most expensive ways to get cash because the charges are cripplingly high. Typically, you are charged 2.8 per cent of the amount that is withdrawn, subject to a minimum of £3, plus interest charged at an average rate of 25.6 per cent.

During 2008 and 2009, Shelter found that four per cent of homes relied on cards to pay mortgages or rent. Last year the figure was six per cent

To add to the costs, interest is usually charged immediately on the first day that money is withdrawn. A spokesman for Moneyfacts, the financial information firm, said: ‘Taking out cash on a credit card should be seen as a last resort. It is an expensive way to borrow.

‘If you need cash, you could look at alternative forms of borrowing such as personal loans, which currently have cheaper rates than the majority of cash rates on credit cards.’

The Council of Mortgage Lenders predicts that 40,000 families will lose their battle with their mortgage repayments and have their home repossessed this year.

It comes as rents have reached record highs, with an average of £692 per calendar month, although this rises to an average of nearly £1,000 in London.

Mr Robb said: ‘Using credit cards to pay the rent or mortgage is simply robbing Peter to pay Paul. It is the worst possible course of action.’

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Well spotted, and possibly one of the best indicators of an inevitable house price crash, perhaps this year

- Home "owners" using credit card to pay their mortgage = imminent default and repossession once ViSA says no

- Tenants using their credit card to pay their rent = eventual eviction (see above) and bankruptcy of (any greedy) landlord

"The Council of Mortgage Lenders predicts that 40,000 families will lose their battle with their mortgage repayments"

Makes it sound like they're fighting against cancer so I guess we should all root for them :blink:

I love bear porn :)

Edited by salamander

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You beat me to it.

2.6 million!

There are something like 11 or 12 million mortgages. and a housing stock of 23-24million.

That means about 22-23% of people cannot afford to pay their mortgage. And their debt is increasing at an even higher rate due to them borrowing further to pay debt.

And these 12 million people with mortgages are called 'owner occupiers' along with people who do actually OWN their own home. 50% of homes are what I would call 'mortgaged occupiers'.

The article then recommends people to borrow personal loans from the bank.

I'm so glad I'm unemployed and have nothing but physical possessions to my name, this funny money is scary stuff. Hopefully I can get a job working for some sound money perhaps gram of 9ct an hour, no pension, no tax etc.

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10%+ of UK housing stock is owned by people part paying a mortgage using credit cards ph34r.gif

I hope you don't mind if I take issue with the word "owned", and if I rephrase slightly...

"10+% of people are living in houses rented from their bank but can't afford to pay the rent unless they borrow it elsewhere using money loaned at interest rates they cannot control"...

is much more wordy but gives me so much more pleasure to see in print :)

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It may be worse. About 4 years ago I went with a friend to a 'property seminar'. The speaker, a very cheesy American, explained how easy it was to be a property millionaire; just get as much money as you can - savings, credit cards, borrow from relatives, dig out from the back of the sofa - to buy BTL properties.

He was selling a £2500 manual - available at a bargain £1500 that day only - to explain how to get indebted up to your eyeballs to buy properties unseen at auction, and, no doubt, with Seven other Tips those City Fat Cats Don't Want You To Know..

What could possibly go wrong? Are YOU afraid of success?

I reckon at least 10 people in the audience bought the manual. They can't all have been planted.

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Makes it sound like they're fighting against cancer so I guess we should all root for them :blink:

+1, and it really annoys me how the press and politicians (of all colours, though more intensively so the more to the left you go) portrays anyone who gets into any sort of financial difficulty as innocent victims who deserve to be rescued by their fellow taxpayers. Nowhere in that Wail article does it mention that for a household to get itself into a situation whereby even a slight reduction in their disposable income can endanger their ability to pay their mortgage indicates a level of irresponsibility on the borrower's part.

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Seems like there's a great many people living in a fools paradise. Once you're robbing Peter to pay Paul and in the process making the situation worse then it's a very slippery slope.

Inevitably some personal tragedies in here but not everyone. This was largely avoidable.

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10 Jan 2010

http://www.telegraph.co.uk/finance/personalfinance/borrowing/creditcards/6963275/A-million-use-credit-card-to-pay-mortgage.html

An estimated one million families have resorted to using credit cards to pay their mortgage or rent during the past year, research showed today.

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

The group warned that many of the people who had resorted to using their credit card to cover their housing costs could find themselves facing homelessness this year, particularly as defaulting on their credit card repayments could lead to their property being repossessed in the worst case scenario.

Its research found that around 6pc of households said they had used their plastic in order to keep up with their housing costs during the past 12 months, according to housing charity Shelter. People in working class professions were most likely to have resorted to using debt to cover their mortgage or rent but many so-called middle class people admitted they had been forced to use their credit card in this way.

Shadow housing minister Grant Shapps said: "The fact that one million households are now resorting to credit cards to help pay their mortgages is a damning indictment of this Government's lack of real help for hard-pressed families.

Last years figures so it's more than doubled?

Another damning indictment of how this govt hasn't helped hard-pressed families?

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It may be worse. About 4 years ago I went with a friend to a 'property seminar'. The speaker, a very cheesy American, explained how easy it was to be a property millionaire; just get as much money as you can - savings, credit cards, borrow from relatives, dig out from the back of the sofa - to buy BTL properties.

He was selling a £2500 manual - available at a bargain £1500 that day only - to explain how to get indebted up to your eyeballs to buy properties unseen at auction, and, no doubt, with Seven other Tips those City Fat Cats Don't Want You To Know..

What could possibly go wrong? Are YOU afraid of success?

I reckon at least 10 people in the audience bought the manual. They can't all have been planted.

I could do with one of those manuals......my dream is to become a pwoperdy millionaire.....or failing that star in a reality tv programme.

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I am not surprised, infact the BBC have run with this on the breakfast "news" programme.

Guess what - BBC have managed to spin this to insist that its mostly "rent" that is being paid on CC's.

http://www.bbc.co.uk/news/business-12120937 - Warning over mortgages and rent paid on credit cards

"A spokesman for the Council of Mortgage Lenders (CML) said the vast majority of cases would relate to rent payments, as regular mortgage payments were deducted from bank accounts rather than from credit cards. Chief executive, Shelter A report, commissioned by the CML and published in November, also concluded that a small proportion of householders used credit cards to pay mortgages."

Haven't these twats at the CML not heard of drawing out cash from the credit card and PAYING into a bank account. What a studpidly idoitic statement.

Edited by Daz

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I am not surprised, infact the BBC have run with this on the breakfast "news" programme.

Guess what - BBC have managed to spin this to insist that its mostly "rent" that is being paid on CC's.

http://www.bbc.co.uk/news/business-12120937 - Warning over mortgages and rent paid on credit cards

"A spokesman for the Council of Mortgage Lenders (CML) said the vast majority of cases would relate to rent payments, as regular mortgage payments were deducted from bank accounts rather than from credit cards. Chief executive, Shelter A report, commissioned by the CML and published in November, also concluded that a small proportion of householders used credit cards to pay mortgages."

Haven't these twats at the CML not heard of drawing out cash from the credit card and PAYING into a bank account. What a studpidly idoitic statement.

Indeed. Until fairly recently, a certain major credit card provider was sending me credit card cheques with the accompanying suggestion that I pay it into my current account to 'treat myself' and/or 'pay a few bills'.

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Further news - it has emerged that collectively the entire population is in massive net debt to the banking system.

A spokesperson said, "We need a means of exchange to run our economy, and borrowing it at interest from the banks is the only way we can get it." :(

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If halfway accurate this figure is incredible, but I have doubts over the veracity of such statistical claims.

However, whilst the base rate and mortgage rates have been desperately low, credit card rates have been rocketing.

For anyone who lived on their credit cards and MEWed at the end of each year, that option has been removed.

So it makes sense that these people having got stuck with an increasing CC debt on which the service cost is rising

would at some point start to struggle with their mortgage.

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Why don't the banks just let the monster DIE.

The more they prop it up the more people are going to sink into slavery trying to hang on.

The lenders are starting to refuse CC for payments:

http://www.bbc.co.uk/news/business-12120937

Shelter said that withdrawing cash on a credit card to pay housing costs was the "worst possible course of action" for householders.
Its findings are based on a survey of 2,202 people but lenders have pointed out that
they would not accept credit cards for regular mortgage payments.

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Seems like there's a great many people living in a fools paradise. Once you're robbing Peter to pay Paul and in the process making the situation worse then it's a very slippery slope.

Inevitably some personal tragedies in here but not everyone. This was largely avoidable.

Of course it was avoidable.........what is the interest rate now on cash on a credit card?...base rate 0.5% I doubt many are paying that. :huh:

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10 Jan 2010

http://www.telegraph.co.uk/finance/personalfinance/borrowing/creditcards/6963275/A-million-use-credit-card-to-pay-mortgage.html

Last years figures so it's more than doubled?

Another damning indictment of how this govt hasn't helped hard-pressed families?

Interesting spin on 'hard pressed families'.

The ones who are hard pressed by all of this are those who are prudent and sensible, and dont want to overpay for a house or go into debt. They are hard pressed by seeing their savings eroded by QE backed inflation and higher taxation to help bail out those who cannot afford the loans they have taken out, and the bankers who commit control frauds with other peoples money to forward loans to the hopelessley indebted.

What Shelter should be calling for is prosecution for the bankers who are the cancer at the centre of the financial system, prudent lending, reduced taxes, and reduced benefits and lower public sector pay, to enable the hard pressed to live their lives a little.

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To put the figures into perspective, 2.6 million people paying the rent or mortgage on credit cards amounts to 90% of the population of Wales or roughly the entire population of Birmingham, Liverpool, Leeds and Manchester combined.

Edited by Mr. Miyagi

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This is a bit of a non-story - it doesn't say people are paying their mortgage/rent every month on the CC, just that they "had" used it. They may well have paid it off in full the following month. Unsecured consumer lending is pretty static, so I doubt this story is making much of an impact.

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You beat me to it.

2.6 million!

There are something like 11 or 12 million mortgages. and a housing stock of 23-24million.

That means about 22-23% of people cannot afford to pay their mortgage. And their debt is increasing at an even higher rate due to them borrowing further to pay debt.

And these 12 million people with mortgages are called 'owner occupiers' along with people who do actually OWN their own home. 50% of homes are what I would call 'mortgaged occupiers'.

The article then recommends people to borrow personal loans from the bank.

I'm so glad I'm unemployed and have nothing but physical possessions to my name, this funny money is scary stuff. Hopefully I can get a job working for some sound money perhaps gram of 9ct an hour, no pension, no tax etc.

... and this is exactly one of the reasons why interest rates won't be rising dramatically for a long long time. The government have to think about those 23% about to to be repossesed, let alone what an IR hike might do to those that are just about managing, who have not been accounted for in these figures.

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To put the figures into perspective, 2.6 million people paying the rent or mortgage on credit cards amounts to 90% of the population of Wales or roughly the entire population of Birmingham, Liverpool, Leeds and Manchester combined.

Mind you, that probably is the actual 2.6 million right there.

This is a bit of a non-story - it doesn't say people are paying their mortgage/rent every month on the CC, just that they "had" used it. They may well have paid it off in full the following month. Unsecured consumer lending is pretty static, so I doubt this story is making much of an impact.

Yup. I used my credit card to withdraw money to have a flutter down the casino last time I was home. Not because I'm hopelessly up to my eyeballs in debt and needed my fix, but because it was the only card I had on me at the time (forgot the others).

Having said that, if I were in money trouble and had a mortgage, I would max my credit limit paying 'essential' bills for a few months and use that time to get a financial cushion up then promptly default on the unsecured loans. By the time they caught up with me I'd hope to be in a position to settle..

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This article is pumped up BS.

Firstly look at the source:

The Guardian

Research for Shelter conducted in August found that 6% of the 2,200 questioned had used credit cards to meet their housing costs in the previous 12 months. This compares to 4% in November 2009, and suggests a national figure of more than 2 million people who are making desperate last attempts to keep a roof over their heads.

Shelter is a homeless organisation, and they questioned 2,200 people, hardly a true representation of the whole of the UK is it..

Unless we know if the where the 2200 were from i.e. one area of one city, or nationwide this survey is total ********.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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