Increase in credit card spending levels

By Reno Charlton
Staff Writer, 28 August 2008

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FOR many families in the UK affordability has been extremely stretched over the past year, with borrowing costs having soared, bills rising, and food and petrol costs rocketing.

In addition to this the global credit crunch that swept across the nation has resulted in far tighter credit conditions, making it difficult for many people to get finance of any sort.

According to one recent report the financial problems that have affected families may have resulted in many people having to rely more on their credit cards in order to make ends meet each month, with some being forced to use their credit cards to purchase essential day to day goods, pay bills, and even make mortgage repayments from time to time.

Figures have shown that over the past twelve months the level of spending on credit cards in the UK has been rising, and this indicates that more and more people are turning to their credit cards in order to keep on top of their bills and payments.

Nation increasingly reliant on credit cards

The data has come from the payment clearance association APACS, which suggests that the whole nation is becoming increasingly reliant on credit cards in the current difficult financial conditions.

Officials from APACS have confirmed that outstanding balances on credit cards are now higher, and that in the twelve months to the end of June credit card spending came to around £1.8 billion.

Officials also confirmed that in the second quarter of this year credit card spending had increased by around seven and a half percent compared to the second quarter of last year, which was before the global credit crunch made its was across the Atlantic.

One cardholder stated that she had been using her credit card to make ends meet due to rising food, petrol, and mortgage costs.

She stated: "I don't like having to use my credit card to make bill and mortgage payments but over the past year I haven’t had much choice, and have had to turn to the plastic to keep on top of repayments whereas before I used to use the card just for one off purchases and emergencies."

Compare credit cards for a cheaper deal

People that are using their credit cards more due to overstretched finances should ensure that they shop for the best deal on a credit card, being mindful about interest rates and other fees and charges linked to the card.

If you have a good credit rating a low interest rate credit card would offer cheaper rates when you need to roll a balance over from month to month. There are many very competitive cheap credit card deals available, and some offering rates as low as 8.5% APR.

For anyone who has a current outstanding balance on their credit card, they should think seriously about moving this balance to a promotional rate deal where they can pay the balance off quicker and with less interest paid overall. A 0% balance transfer credit card offer promotional 0% periods for up to 16 months, or a life of balance transfer credit card would offer a very low rate until the balance was repaid in full.

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