More than five million homeowners are turning to their credit cards to pay at least one household bill a month, a survey has revealed, prompting fears about the fragility of Britons’ personal finances in the wake of the recession.

The study found that 14 per cent of Britain’s 35 million credit card users have paid gas and electricity, phone and insurance bills with their plastic, while another 7 per cent admitted to taking out cash from an ATM on credit, incurring hefty fees.

Kevin Mountford, of moneysupermarket.com, the price comparison website that conducted the survey, said: “It’s alarming to see so many people using their cards to pay for what should be everyday spending. Using a card in this way and not paying off the full balance each month is the first sign of financial difficulty.”

The interest rates applied by credit card companies on balances average 17.19 per cent, up from 16.62 per cent in November 2008.

Steven Jackson of beatmydebt.com is not surprised by the findings. "There are tens of thousands of people in the UK who are currently struggling to make ends meet. The recession has not yet ended for them" he said.

"It is common place for people to supplement their income using both bank overdrafts and creditor cards. Many withdraw cash from one credit card to pay off others, robbing Peter to pay Paul each month. Where this happens, people need to act quickly to get good debt management advice" Jackson added.

Rising cost of living

Inflation has not helped. In April, the retail prices index registered a 5.3 per cent rise in the cost of goods and services from a year earlier.

Citizen’s Advice, the debt charity, received 422,835 new inquiries about credit, store and charge card debt in the last financial year, an 11 per cent jump on the previous 12 months.

Catherine Torazzo, of Citizen’s Advice, said: “Our advisers are speaking to people who are using their credit cards to make ends meet. We have seen more people coming to us with debt problems since the recession officially ended.”

Struggling households are also turning to pawnbrokers. Paul Aitken, of borro.com, the online pawnbroker, said: “There has been a big upswing in people coming to us for £1,000 plus loans which they say they are using to help subsidise their mortgage payments, utility bills and school fees.”