Pepper Money’s research found even after paying off their credit cards, nearly a quarter (24%) of UK homeowners kept the account open and reused it for major purchases

More than a third of homeowners have two credit cards and 14% have three, according to the research by specialist mortgage lender, Pepper Money.

Meanwhile a quarter of homeowners have dipped into their overdraft at least six times in the past year with one in 10 using it every month. This could put them at risk of unnecessary overdraft fees if not paid off by the end of the month.

The research has painted a ‘concerning’ picture of the UK’s personal finance landscape, according to Pepper Money.

Among younger borrowers – those in the 25 to 34 age group – the proportion with two credit cards or more rises to 72%. This is raised concerns they could establish unhealthy credit habits early on.

Pepper Money said the significant percentage of younger homeowners relying on multiple credit cards also suggests that alternative borrowing solutions are needed to meet current levels of demand.

But many people across all ages could be at risk of rising debt. Pepper Money’s research found even after paying off their credit cards, nearly a quarter (24%) of UK homeowners kept the account open and reused it for major purchases.

What’s more, 16% of respondents owed over £10,000 on their credit cards, raising serious concerns about UK homeowners’ long-term financial resilience.

Ryan McGrath, director of second charge mortgages, 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, he said.

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, he said.

He added: They also provide access to funds without disturbing an existing mortgage, an important consideration in today’s interest rate environment.