The study found that 36% of homeowners have two credit cards and 14% have three, with younger homeowners most likely to rely on multiple cards. Among those aged 25 to 34, nearly three-quarters (72%) have two or more credit cards.
A quarter (25%) of homeowners said they had used their overdraft at least six times in the past year, while 13% reported using it every month. The research also revealed that 16% owe over £10,000 on their credit cards, raising concerns about long-term financial resilience.
Even after clearing balances, 24% of homeowners keep their credit card accounts open and reuse them for large purchases. When making significant financial commitments such as home improvements, 28% of homeowners said they were looking to borrow between £10,000 and £25,000, while 14% planned to borrow between £25,001 and £50,000. The average borrowing amount was £22,059.
Despite this, nearly a third (29%) of homeowners said they felt limited by the range of financial products available to them when planning major purchases, which may be driving greater reliance on short-term credit.
A study earlier this month by the lender showed that a quarter (26%) of homeowners had missed credit card payments in the last two years, affecting their borrowing potential when looking for finance in future.
Ryan McGrath, director of second charge mortgages at Pepper Money, said: “Homeowners are increasingly turning to short-term credit like multiple credit cards and overdrafts to fund major purchases, but while these options may offer convenience, they often come with high interest rates, fees and can lead to long-term financial strain when minimum payments aren’t met.
“Second charge mortgages can offer a smarter alternative, particularly for those looking to borrow larger sums – for major expenses such as home improvements. Typically, much lower interest rates compared to credit cards and the ability to spread costs over longer repayment periods, to reduced monthly costs, second charge mortgages can offer homeowners greater financial stability and a credible method to repay debts. They also provide access to funds without disturbing an existing mortgage, an important consideration in today’s interest rate environment.
“The research also shows that nearly a third (29%) of homeowners feel limited by the financial products available to them. It’s vital that we raise awareness of second charge mortgages as a viable and responsible borrowing option that can help people make informed financial decisions that can improve their long-term resilience by leveraging their property wealth.”
