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Credit card shouldn’t be used for mortgage payment

Credit card shouldn’t be used for mortgage payment

Category: Credit cards

Updated: 12/03/2009
First Published: 12/03/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Credit cards customers have been urged not to consider using this form of finance in order to pay off mortgages.

According to the Independent's House Doctor, doing so can result in high charges - both in interest and for withdrawing cash using the card.

The paper explained that unlike purchases, taking money out can lead to interest of up to 29 per cent, while a 2.5 per cent withdrawal fee may also be added.

Richard Morea, of mortgage broker London & Country, added that credit cards should only be used as an absolute last resort and that consumers should instead contact their bank if there is a problem.

"Lenders really don't want to start down the road to repossession, as it can be very long, drawn out and costly and there are plenty of other options you can consider," he was quoted as saying.

Saga recently revealed that 32 per cent of credit card customers are using a reward credit card in order to maximise their spending.

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