Research from Pepper Money found that 12% had missed a credit card payment in the last six months and 28% said they did not pay their credit card off in full every month.
Further, 7% of people only make the minimum payment on their credit every month, even though making the full payment prevents the interest from building up.
Pepper Money said this research highlighted consumer borrowing habits and the impact this could have on their creditworthiness in the future.
A third of respondents admitted to not knowing the annual percentage rate (APR) on their credit cards, suggesting they were not aware of how much unsecured credit was costing them.
As of May this year, the average APR was 21.54%.
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Pepper Money said a second charge mortgage could simplify matters for borrowers and reduce outgoings if they secured debt against their property instead. The lender suggested that by consolidating debt, homeowners could save as much as £680 per month.
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.”
He added: “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.”
