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Credit Card Spending

It would seem that UK consumers are becoming increasingly fond of using their credit and debit cards to pay for their purchases. The convenience offered by paying by plastic as opposed to carrying cash around is leading to an increase in the use of these cards, especially in paying for day to day goods.

In the past credit cards were generally used for making one-off purchases of special non-essential items, usually those with a high value. This is now no-longer the case, with many people using their credit cards in much the same way as they would a debit card, or even cash. The average value of a credit card transaction has fallen to around £65, which isn’t far off the level of £41 seen for debit cards.

This rise in the usage of credit cards could be down to the combination of a number of factors, including consumers wishing to take advantage of reward schemes that offer cashback or reward points for purchases made, as well as those wishing to benefit from the interest free periods offered by most cards. By paying on their credit card, the consumer can effectively delay the payment until there bill arrives, which means their money stays in their account longer and so earns them more interest.

Used sensibly, a credit card can be a very useful and beneficial financial tool, however it is easy to get into problems by using one. Getting into the habit of paying for things on a credit card, and based on current trends this is something that many people are doing, can lead to spending getting out of control and having large bills that you cannot afford to clear fall through your letterbox.

With such high usage, credit cards are big business for the card issuers and there are many of them vying for your custom. One very popular approach that is used by them to attract customers is to offer zero percent interest on balance transfers, as this way people can switch cards and instantly benefit as they will not have to pay the interest that there previous card was charging them. If you are considering doing this, then be sure to check what the standard purchase rate is, and how long the interest free period lasts to determine if you really are getting a better deal.

If you are having trouble with outstanding credit card debts, then a debt consolidation loan may be exactly what you need. Such a loan allows you to clear this high interest debt from the card, transferring it to a lower rate loan that allows you to spread the payments and so get back on top of things.