Consumers get thrifty with their credit cards

Almost half the nation's credit card users are reining in their spending by just under an average of £100 a month or the equivalent of over £1,100 a year according to research from Tescocompare.com, the financial search engine. However, whilst 14.6 million consumers (44 per cent) are adopting more thrifty spending habits, one in three has no intention of cutting back their credit card use at all.

The research from Tescocompare.com shows that consumers cutting back on their credit cards have reduced their average balance by £386 to £2,333. One in three (37 per cent) has cut their credit card spend to reduce debt, a quarter (25 per cent) to increase savings and a fifth (18 per cent) just want to be less reliant on credit. A further 5.4 million (16 per cent) plan to use their cards less in the future.

However, 4.8 million have seen their outstanding balances rise by £412 on average in the last six months. 2.3 million (7 per cent) of those that have not made cutbacks say they could not maintain their preferred choice of lifestyle without their credit cards and, worryingly, one in ten (11 per cent) would be unable to manage their finances without their cards.

Debra Williams, spokesperson for Tescocompare.com said: "In the current climate it's encouraging to see so many consumers taking significant steps to reduce their reliance on credit. Even those who aren't currently in a position to make cutbacks, could still save themselves some cash by shopping around for a better deal.

"Our research reveals only half of all credit card users ever having switched provider, therefore we'd urge anyone that uses a credit card to review their current card to check they're on the best deal possible. Just switching to a card that pays a lower rate of interest or one which has an interest free repayment period could cut the cost of borrowing."