Big rise predicted in January 2012 credit card usage
Over 12 million people (36 per cent of credit card holders) will spend the first month of 2012 relying on their credit cards simply to fund day-to-day living costs, according to the fifth annual Post Office Consumer Credit Report.
Whilst this is only a 2 per cent increase on the 2011 figures, it does highlight the large number of people relying on credit cards for essential purchases in January. The report also revealed 42 per cent of credit card holders are expecting to use their cards for grocery shopping.
Against the backdrop of economic instability and rising living costs, consumers expect to be more reliant on their credit cards in January 2012 than this year, with over two million (seven per cent) people planning to put more on plastic in January 2012 compared with January 2011. Almost four in ten (38 per cent) say they plan to increase their spend by up to £200.
Other usages include:
One in ten (10 per cent of those using their credit card in January) say they will need to pay off outstanding Christmas costs and debts
Almost one in ten (seven per cent) saying they will need to use their credit card in January to pay their domestic bills.
A third (32 per cent) admit they will use their credit card to fund January sales shopping
And almost a quarter (22%) say they will use their card to book a holiday in January.
The report highlights, as a result of paying off a credit card balance, almost a quarter (21 per cent) say they will need to budget more carefully throughout 2012, with an additional six per cent anticipating they will be seriously over stretched due to their debts.
The study also reveals it's a case of the more the merrier for men - with one in five (21 per cent) men having three or more cards compared to 17 percent of women owning the same amount. Those in the East of England are the biggest multi-card culprits, with 27 per cent of them owning three or more cards.
Post Office Head of Credit Cards Az Alibhai said: "Whilst it is good to see so many people intending to manage their credit card purchases and repayments sensibly, there are still too many people who aren't thinking of the consequences.
"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. People with debts spread across different cards may benefit from consolidating their debts on to one card to make them easier to manage and to further reduce the amount of interest being paid."
The Post Office Credit Card continues to offer zero per cent on balance transfers for the first 14 months and new purchases for the first three months. Also, there is zero per cent commission on foreign purchases and it offers no cash advance fee when purchasing foreign currency from the Post Office (either online or in branch). Customers also benefit from zero per cent on new balance transfers for five months for the second and third year. Applications can be made online, over the phone, or in-branch.
To find out more about the Post Office Credit Card, visit postoffice.co.uk.