More than a quarter (26%) of UK homeowners have missed a credit card payment in the past two years, according to new research from specialist lender Pepper Money.
The findings highlight growing pressure on household finances and the potential long-term impact on borrowers’ creditworthiness.
The study found that one in ten (12%) homeowners have missed a payment in the past six months, as many continue to struggle with high living costs and rising interest rates.
Despite average credit card APRs reaching 21.54% as of May 2025, almost a third (28%) of borrowers said they do not pay their balance off in full each month.
A further 7% admitted to paying only the monthly minimum, risking mounting interest costs and long-term debt.
The research also found that a third (33%) of borrowers do not know the APR on their credit cards, underlining widespread misunderstanding about the true cost of unsecured borrowing.
Pepper Money said that second charge mortgages can provide a practical alternative for homeowners juggling multiple high-interest payments, potentially saving up to £680 per month through debt consolidation.
Ryan McGrath, director of second charge mortgages at Pepper Money, said: “Our data reveals some concerning trends among UK homeowners who are turning to short-term, unsecured sources of credit, like credit cards, without due consideration to the longer-term impact this decision can have.
“Missing payments or only making the monthly minimum can lead to an avoidable debt spiral as borrowers juggle high interest rates, often spread across multiple credit products.
“Second charge mortgages can support borrowers by enabling them to consolidate their debts and get on a securer financial footing.
“Secured against a homeowner’s property, second charge mortgages typically offer lower interest rates than credit cards, as well as predictability in repayments from month to month. Second charge mortgages can provide access to funds as quickly as credit cards but have the added benefit of lower interest rates without disturbing other lending products in the same way a remortgage would.
“The average time from application to completion is moving towards the 190 hour mark with some cases by Pepper completing in as little as three days.
“Second charge mortgages are a genuine alternative for borrowers looking for greater choice when it comes to responsible borrowing, leveraging their greatest financial asset to bolster their long term financial resilience.”
