Research suggests that there are over 2 million people in the Britain are using credit cards to pay their mortgage or rent according to Shelter, a UK charity which provides support for the homeless and lobby for more affordable housing.
From a survey of 2,234 adults aged 18+, conducted by YouGov Plc, it was found that 6% had used their credit cards to pay either rent or mortgage payments in the 12 months to August 2010. Based on there being 47.3 million adults in Great Britain, Shelter estimates 2.6 million people were shockingly using their credit cards to pay for housing.
With the deterioration in the economy and the vast number of redundancies it is not surprising that many people are having to resort to credit cards to pay for their monthly accommodation costs. However, it is not advised to pay basic household costs with additional debt. This is especially the case for making mortgage payments, where the borrower is essentially ramping up their debt levels by paying for their current debt obligations with more debt.
These recent findings, in combination with a weak labour market, support the need for mortgage and rent protection policies. Mortgage Payment Protection can be used to cover the risk of home loan default as a result of loss of income due to accident, sickness or unemployment. There are other forms of payment protection, such as bill protector policies, that can be used to cover rent and utility bills from these risks. In this market it definitely makes sense to explore these protection options.