Credit Card Crunch Day: Brits Turn to Credit 21 Days After Payday
By Moneysupermarket.com, PRNEMonday, July 11, 2011
CHESTER, England, July 12, 2011 -
- A quarter of Brits use credit cards to tide them over until
the next payday - One in ten use a card as a fallback in the first 15 days
after being paid - Women likely to use their card as a fallback sooner than
men
Britain’s ‘
card crunch day’ - when people resort to using
cards as a fallback for when cash in their current account runs
low - is on average 21 days after they’ve been paid each month.
Research* from
the UK’s number one comparison site, reveals the monthly habits of
consumers when it comes to using credit cards. A quarter of Brits,
some 11 million people, are turning to their credit card as a
fallback when they run out of funds in their current account. Of
this group, whilst the average fallback day is 21 days after
pay-day, one in ten (9 per cent) pull out the plastic less than 15
days after they have been paid, meaning they will be funding the
remaining fortnight on their cards.
One in three (35 per cent) Brits use a credit card each month
for everyday items, such as food, groceries and petrol, but say
they are confident at repaying the amount they use the following
month. A further third (32 per cent) say they use their credit card
for big ticket items, such as holidays, which they say they may not
be able to repay immediately.
Kevin Mountford, head of banking at
said: “With most of the population feeling the pinch at the
moment, it’s no surprise to see so many people reliant on credit so
early in the month. However, unless you plan this properly and know
you’re able to pay off your balance, this can be a dangerous trap
to fall into. If you’re the type of person who doesn’t pay off
their card every month, you need to look at the steps you can take
to reduce monthly expenditure before turning to credit products.
Budgeting is crucial at the moment and people will be amazed at how
much cash they can free up each month by simply sitting down and
going through their finances.
“For those who simply cannot make ends meet without using a
credit card, the important thing is to ensure they are borrowing in
the cheapest way possible and not incurring any charges. Firstly
they need to shop around and make sure they are on the best deal to
suit their needs, and switch if necessary. A card offering an
interest free period on purchases is a good solution, especially
for larger items, but if you are using a card to tide you over
until the end of the month, still try and pay it off when you get
paid, otherwise the outstanding balance will soon escalate. Anyone
taking out one of these products should set up a direct debit to
pay back at least the minimum each month or they risk losing the
promotional rate if they miss a payment.”
The research further revealed that the Welsh are the quickest to
turn to credit, bringing out their cards, on average, ten days
after pay day, whilst those in the East of England last the
longest, holding off, on average, until 27 days after they’re been
paid.
Men are also less likely to turn to credit in the first two
weeks after being paid, with just six per cent whipping out their
flexible friends compared to 13 per cent of women. However, men are
more likely to use credit for big ticket items which they may not
be able to repay immediately - 35 per cent flash the plastic each
month compared to 29 per cent of their female counterparts.
Kevin Mountford continued: “Using a credit card for
larger purchases can be a good way to budget, but anyone going down
this road needs to ensure they are using an appropriate product and
more importantly, are able pay back the balance. Again, a card that
offers interest free purchases such a good option for anyone
looking for some short-term financial flexibility. However,
consumers using interest free products in this way need to create a
repayment plan and stick to it as when left unattended, credit card
debt has a habit of lingering and costing a packet over the long
run.”
Notes to Editors:
*Opinium Research conducted research between 21st and
23rd June 2011, amongst 2,013 nationally representative
adults aged 18+
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Tags: Chester, England, July 12, Moneysupermarket.com, United Kingdom
