News: Consumers turn to credit card to pay for daily essentials

Fri, 25 Jan 13

A third of people with credit cards will rely on their plastic to pay for daily essentials in January, according to the sixth annual Post Office Consumer Credit Report.

The expense of the festive season and rising living costs has left many consumers feeling the pinch with more than two-fifths confessing they will use their credit card to pay for everyday grocery shopping. In the rush to grab a bargain in the January sales, nearly a third admit they will turn to plastic to pay for any sales shopping.

It also looks like people will continue to rely on the credit card over the year with 8% admitting they will use their plastic more frequently for everyday purchases.

Consumers in London, whose Christmas festivities may have been more expensive because of the high prices in the capital, are most likely to turn to their credit card this January (18%), compared to just 5% of people in the North West.

The report highlights three million people (9% of credit card users) expect to spend more on their credit card this month compared with January last year - by nearly £300 on average.

John Willcock, Head of Credit Cards at Post Office, said: "While many people intend to manage their credit card purchases and repayments sensibly, there are still too many people who are not thinking of the consequences of their festive spending. It is surprising to see so many people forced to rely on their plastic for daily essentials this month.

"The New Year is the ideal time to think about financial planning and organising a household budget. I urge people to check 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 reduce the amount of interest being paid."

See also: Credit Cards

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