Over 40,000 households in Scotland have used credit cards to pay their mortgage or rent in the past 12 months, according to a new survey published today by Shelter in its magazine ROOF.

In a desperate attempt to stay on the housing ladder a growing number of young people, including first-time buyers, are turning to credit cards, with almost three per cent of Scots saying they had done so in the last 12 months.

The survey, conducted by YouGov for ROOF magazine, polled households across the UK, following the Northern Rock crisis. In Scotland, three per cent of respondents who pay a mortgage or rent said they had relied on credit cards to make payments, equating to a national figure in Scotland, of more than 40,000 households.

Shelter Scotland director Archie Stoddart described the results as shocking and said: 'The number of people hit by the credit crunch, interest rate hikes and unaffordable housing costs are rapidly rising.

'For many people trying to keep a roof over their head, desperation is driving them to short-term, high-cost borrowing, which will in some cases end in personal disaster. Ordinary people are being forced to seek more risky and expensive ways to stave off the threat of eviction and repossession.

To ensure people have real choices about their housing, we must increase the stock of affordable rented homes in Scotland.'

Most credit card companies charge interest at between 15 and 18 per cent - nearly 50 per cent above even the highest mortgage interest rates of 11 or 12 per cent in the sub prime sector. But for people with poor credit ratings the card companies can charge interest rates of up to 40 per cent, a staggering five times above the average mortgage rate.

Citizens Advice Scotland - for whose member bureaux credit card debt is one of the main problems that clients request help on - expressed concern over the findings.

'This is a potentially worrying development,' said a spokesperson. 'The level of UK credit card debt is already the highest in Western Europe. If some people are now adding in their monthly mortgage payments then alarm bells should ring as to how sustainable this is. As a coping strategy, it may be ok if you can fairly quickly get your finances back on course - but if you just end up making the minimum payment you are only steering yourself into a downward spiral of debt.'

Shelter's Archie Stoddart added: 'Clearly this is a huge problem which will only become more widespread as housing costs continue to rise.

'We would urge anyone struggling with the cost of their mortgage or rent to seek independent financial advice or log onto www.shelter.org.uk urgently before resorting to such desperate, and ultimately more expensive, measures.'

Case study

Megin *, 25, was forced to pay her mortgage with her credit card for three months - totalling nearly £1,000 - after finding herself with an eratic source of income

She said: 'I had been working throughout university to pay my mortgage, but as my fourth year exams approached I had to reduce my hours to give me time to study.

'When my exams were over I found it hard to get the same hours as before in my old job and finding a new job immediately wasn't possible.

'I called the JobCentre to find out if they could help me, but they said because I was still working some hours I didn't qualify for any help.

'I borrowed some money off family members, but in the end I had to use my credit card to pay my mortgage. I ended up making three payments totalling around £1,000.

'I almost didn't expect my lenders to let me use it, but I suppose as long as they get their money they don't mind how you pay.

'I was really worried because I was basically borrowing money to pay off another debt. I was scared it would get out of control and I wasn't really sure that I could even afford the credit card repayments.

'I ended up getting a job quite quickly and was able to get it under control - however I know for lots of people finding work isn't that easy and they could get in a real mess.'

* Name has been changed.

To subscribe to ROOF Magazine, visit www.roofmag.org.uk

Notes to editors

1. Shelter Scotland, along with other housing organisations, are calling for 30,000 affordable rented homes for Scotland through this year's comprehensive spending review. For more information visit the media room at www.shelter.org.uk/csr_media
2. Shelter believes everyone should have a home and helps 170,000 people a year fight for their rights, get back on their feet, and find and keep a home. We also tackle the root causes of Britain's housing crisis by campaigning for new laws, policies and solutions.
3. Spokespeople are available for interview, telephone the media office on 0844 515 2442. An ISDN line number is available for broadcast interviews.
4. For more information about Shelter visit www.shelter.org.uk