One should never under-estimate the financial illiteracy of the British people. As a starter, people seem congenitally incapable of resisting debt. As house prices have rocketed, people have preferred to take on increasing amounts of debt rather than sensibly rejecting bubble madness and waiting for the inevitable correction.
Now, we hear that 1 million mortgage shackled debtors have used their high interest credit cards to make payments on their house. You can find this sorry story here.
1m using plastic to pay their mortgage
More than one million people use high-interest credit cards to cover their mortgage or rent payments, debt experts say. Six per cent of householders have turned to plastic to pay for the roof over their heads during the past year, according to housing charity Shelter. Young people struggling to stay on the property ladder are most likely to use the 'rob Peter to pay Paul tactics', despite risking long-term ruin.
Many credit card companies charge interest between 15% and 18% - up to three times higher than typical mortgage rates. 'Ordinary people are being forced to seek more risky and expensive ways to stave off the threat of eviction and repossession,' said Shelter chief executive Adam Sampson. The alarming trend was revealed by a Shelter survey of nearly 2,000 people.