Borrowers use their plastic to pay the mortgage

More than a million households have resorted to using credit cards to pay their mortgage or rent during the past year, according to a survey carried out by Shelter, the housing and homelessness charity.

Younger people are more likely to be relying on plastic to keep a roof over their heads, with 7.5 per cent of 18- to 24-year-olds admitting they had used a credit card for their mortgage or rent.

Shelter also partially blamed the problem on irresponsible mortgage lending, saying banks and building societies were allowing people to overstretch themselves, forcing them to turn to their cards just to stay afloat.

Shelter's chief executive, Adam Sampson, described the findings of the survey as "shocking".

"The number of people hit by the credit crunch, interest hikes and unaffordable housing costs is rising rapidly," he said. "For many people trying to keep a roof over their head, desperation is driving them to short-term, high-cost borrowing. Ordinary people are being forced to seek more risky and expensive ways to stave off the threat of eviction and repossession."

The group said most credit card companies charged interest of between 15 and 18 per cent – nearly 50 per cent more than even the highest mortgage rates of 11 to 12 per cent, for people with adverse credit histories.

James Cotton from broker London & Country warned that paying one debt off with another is a dangerous habit to get into.

"This is especially the case with credit cards, which carry much higher interest rates than mortgages," he said. "It is important to tackle the problem. Many borrowers out there could reduce their monthly commitments considerably by reviewing their mortgage rate – especially those who are still paying their lender's standard variable rate."