Consumers using credit cards to protect against retailers going bust

Savvy consumers are very aware of the effect of the current economy on retailers, and are taking steps to make sure they are not penalised if fragile businesses go under, according to research from Saga Platinum card.

Almost half (46%) of the population say they are now using their credit cards to ensure their purchases are protected in case a vendor goes bust, as they know that providers will enable them to claim a refund if the purchase is over £100. This number rises to a significant three in five (58%) of the over fifties, which goes to show that the older generation is both more financially aware and more eager to protect their purchases.

Other reasons that consumers use credit cards as opposed to cash in the current climate include the fact that they get cashback and rewards every time they spend on them (32% in total and 36% of the over 50s) and because they help them manage their money (24%) - both clearly important when many people are cutting back. In addition, nearly half (46% in total, and 56% of the over 50s) say that it is more convenient than carrying cash and just over a fifth (22%, compared with only 15% of the over 50s) say it's because they cannot afford to pay for items in one go.

Andrew Goodsell, Chief Executive, Saga Group, said: "The credit crunch has affected people in a number of ways and as a result have become more wary; choosing brands they trust and using credit cards as they provide added protection in uncertain times."

Throughout 2008, holidays, eating out and supermarket shopping were by far and wide the most regular credit card purchases for the over 50s, showing many are still finding time and money for luxuries. Tesco and Sainsbury come out as the most popular places for this age group to shop, with no sign as yet that they are turning to the discount food retailers for their weekly shop.

A third of credit card users (30%) continue to use their card abroad as much as they ever have. However, almost two in five (37%) do not use their plastic whilst on vacation, potentially because many providers, unlike Saga, levy a fee for doing so.