More people than last year are expected to turn to credit cards in January, with 38% of consumers spending up to £200 this month.
The fifth annual ‘Post Office Consumer Credit Report’ has found that 36% of credit card holders (over 12 million people) will use their credit cards to pay for essential purchases in January – with 42% of them even using their cards for grocery shopping.
This consumption represents 2% more than in January 2011, revealing that British consumers are more reliant on plastic payments than before. Almost four out of ten Brits (38%) said in the survey that they expect their spending on credit cards to increase this month.
Credit card use
When asked about their credit card spending, up to 32% of Brits said that paying for January sales shopping will be their main credit card goal. A quarter (22%) admit they will use their card to book a holiday, whereas one in ten will use it to pay off outstanding Christmas costs and debts. 7% of Brits will even put their domestic bills on their credit card.
“With many people expecting to use their credit card more in January, we urge cardholders to check out their interest charges and consider switching to a deal with a zero per cent offer on purchases and balance transfers,” said Az Alibhai from Post Office Head of Credit Cards.
Those figures show how some UK households are struggling even at the beginning of the New Year, with a number of them turning to credit cards or even unsecured loans in order to afford their everyday expenses.
In fact, 21% of them admit they will need to budget more carefully throughout 2012 in order to pay off their debt and 6% anticipate they will be seriously over-stretched due to their debts.
As with any form of borrowing, it is important to ensure that you are able to meet repayments and fully understand the terms and conditions attached to your loan.