More people are relying on credit cards

According to a recent report an increasing number of people in the UK are relying on their credit cards, with many depending on their cards in order to fund day to day living as well as for expensive or one off purchases.

In the past credit cards have provided flexibility, ease, and convenience for consumers, but many people today – particularly younger borrowers – are looking upon their credit cards as a necessity, and often using it to purchase essentials.

The report states that many of those using their cards on a daily basis are not making any more than the minimum repayment each month.

It is fine to use a credit card on a daily basis if you repay the balance in full each month, but if you only pay off a small part of the balance then you can quickly find yourself in spiralling debt.

Figures from the report suggested that under 50% of cardholders are repaying their balance in full each month, yet an increasing number of us are using the card to fund the purchase of necessities.

For consumers that do pay their balance off each month and do not incur interest a rewards based credit card may be suitable, as it allows them to earn rewards for using the card yet they pay no interest. For consumers that do not repay the balance in full a low interest or 0% credit card is the recommended choice.

One industry professional said that people tend to use their credit cards more during the first couple of months of the year because they are still trying to get their finances straight after Christmas, and usually money is still tight due to the expense of Christmas.