This article starts off scarily enough….

(Fortune Magazine) — This past summer’s subprime meltdown involved about $900 billion in now-suspect securitized debt, reckless lending, and consumers who buckled under the weight of loans they couldn’t afford. Now another link in the consumer debt chain – credit cards – is starting to show signs of strain. And the fear that the $915 billion in U.S. credit card debt (an uncannily similar figure) may blow up has major financial institutions like Citigroup, American Express, and Bank of America strapping on their Kevlar vests.

But like any good ghost story, it saves the punch line for last….

It’s a sign of the times that, according to one survey last month, 6% of British homeowners have been using their credit cards to pay their mortgages. That’s suicidal, of course, given that credit card interest rates are more than double even the heftiest mortgage. Keep your fingers crossed that it’s not a trend that crosses the Atlantic.

Man, I have read a lot of scary things over the last couple of months. But that has got to be the scariest. 6% of all households pay their mortgages with credit card debt? If this figure was true, it would mean the end of the British financial system. In the first place, it would guarantee that at least 6% of all houses in Britain would have to go into foreclosure. In the second place, it would mean that banks would lose all of the money loaned to those people through unsecured loans (credit cards). In the third place, the banks would not be able to recover very much money from house sales because so many other people would be in the same boat. Bank reserves are not all that high, and I don’t think they could take that kind of loss.

The good news is that it is not really as bad as all that. I did some digging; the survey is counting all the people who had to use their credit cards once or more in the last 12 months to make one mortgage payment. So it’s not like 6% of British homeowners have been depending on their credit cards to keep a roof over their heads month after month.

The bad news is that the fact that 6% of British homeowners have had to make recourse to credit cards to make a mortgage payment is still not good news. Especially if you consider that fact in the light of this graph here and this report here.