Credit card reliance ‘increases’

A quarter of all credit cardholders are more dependent on credit than they were last year, according to new research.

The Post Office found that 41 per cent of people with a credit card are using them for everyday living costs such as food.

Half of cardholders are also planning to use their plastic to bag a bargain in the January sales and 28 per cent want to purchase bigger products such as holidays with theirs.

“January is the time of year when people struggle with their money the most,” commented director of lending at the firm Gary Fitton. “Many people have over-stretched themselves over the Christmas period and have little choice but to use their credit card.”

However, Mr Fitton warned that high interest rates mean it is “crucial” to find a good deal on a credit card and advised borrowers to look out for zero per cent on purchases or balance transfer deals.

According to Credit Action, the average interest rate charged on a credit card is currently 17.73 per cent, 12.23 per cent higher than the Bank of England’s base rate.

© Adfero Ltd

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