Brits still relying on credit cards for everyday costs
Research from moneysupermarket.com has discovered the depth of reliance Brits have on credit cards. The research found that one in five of us carry more than three credit cards and that 17 per cent of credit card holders use their card at least once a day, with a further 28 per cent using their card at least once a week.
The research also discovered a worrying trend in that over 14 million Brits are using their credit cards to fund day to day expenses. The most popular use of credit cards is to purchase goods online, with more than half (56 per cent) of credit card holders using their card for this purpose. 40 per cent of credit card holders use their plastic for day to day spending. However, the data also showed that consumers are savvy when it comes to making their plastic work hard for them - 25 per cent use their card specifically for the reward points, and 11 per cent use their card for cashback and zero per cent purchases.
Peter Harrison, credit cards expert at moneysupermarket.com, said; "Credit cards are still playing an important role in the nation's finances. Our research makes clear the extent to which many of us rely on credit cards at frequent intervals in our lives although it's alarming to see that so many people are using credit to pay for day to day expenses as this can be a dangerous habit to get into. If you are funding everyday items such as petrol or food, and still paying for it long after the product has been used, you should seriously consider stopping.
"Holding more than one credit card can be a good idea, if you are using one for balance transfers and one for purchases, and have suitable zero per cent deals on both; however, holding more than two cards does expose you to a large amount of credit, which may not be financially healthy and could make it difficult to obtain further credit in the future."
Women and men
moneysupermarket.com's research has found some surprising discrepancies between men and women in the way we use our credit cards.
Whilst more than one in four men (26 per cent) has three or more credit cards, just 16 per cent of women have exposed themselves to this level of credit, in fact a third of women don't have a credit card at all, compared to a quarter of men.
Only half of all female credit card holders (49 per cent) flash their plastic more than once a month, but half the boys (49 per cent) use theirs on a weekly basis.
Peter Harrison, continues; "There is a national stereotype of a woman maxing out her credit card on bags and shoes, but our research shows that men are consistently more reliant on credit cards than women. It also shows that women are more savvy when shopping for credit, with more women choosing their credit card based on the incentives offered."
Credit through the generations
The research also found that those over 70 are likely to hold more credit cards than any other age group, with 27 per cent hoarding more than two cards compared to a national average of just 20 per cent.
Whilst the over 70's are well above the national average with regards to how often they use their credit card, with one in four over 70's credit card holders spending on the plastic everyday, they are eclipsed by credit card holders under 20, a third of whom (31 per cent) rely on their card on a daily basis.
Peter Harrison added; "It seems that our reliance on credit is heightened at the beginning and end of our financial lives. Young people must work hard to avoid the temptations of becoming trapped in debt. Reliance on credit cards at a young age is a dangerous trend, especially now that our credit record can open and close so many other doors."
UK Credit card hot spots
The North East has emerged as the region of the UK with the least reliance on credit cards, with half (49 per cent) eschewing credit cards altogether, and just one in ten (11 per cent) holding more than two. In stark contrast to this, just one in five Londoners are without a credit card and one in four holds more than two.
Credit card holders in Northern Ireland use their plastic the least often, with just nine per cent using the credit card once a day or more. Again London's credit card holders come out at the bottom of the pile, with 31 per cent using their card everyday.
Northern Ireland's credit card holders are also the least likely to be using their card to cover day to day spending day to day, with just one in four (26 per cent) admitting to this. However more than four in ten (42 per cent) of the North West's credit card holders are using their card to fund day to day purchases.
Peter Harrison concluded; "These figures really highlight the disparity of credit card usage between different regions of the UK. Clearly London is something of an anomaly and its figures stick out like a sore thumb. Those in the North East are clearly far less reliant on credit cards than the vast majority of the UK, and their neighbours in the North West aren't far behind."