Relying on credit cards may cause debt problems and increase nee

More and more UK consumers are relying on credit cards to fund their lifestyles. This may not be as shocking a revelation as the 5 million who admit to using a credit card to pay their essential living costs an additional 2.5 million take cash advances on their credit cards.

Credit cards have always been a contentious form of credit and most believe the charges do not reflect their current usage trends. Responsible use is encouraged but rarely practised as UK consumer debt shows little signs of recovery.

Justice Goddard commented on the figures released by moneysupermarket.com and said “A credit card is a form of flexible finance. But no longer your ‘flexible friend’ as most lenders only require a minimal monthly payment towards the outstanding balance. The payments made by consumer are then used to reduce the balance on the purchases and balance transfers first and then any cash advances. The rate charged on cash advances are on average 20%.” 

“Credit cards are convenient and are available everywhere. Balance transfers and taking advantage of interest free items is the best way to use your cards. Funding a lavish lifestyle or even buying your weekly/monthly shopping on a credit card may indicate the first signs of financial difficulty”.

Consumers are increasing the use of credit cards to pay for essential household items and this may cause a revolving spiral of debt issues which result in individuals robbing Peter to pay Paul. i.e. using one form of credit to pay another such as using cards and overdrafts to pay for loans and your mortgage.

If you are using your cards to pay bills every month and need help managing your finances click here for free advice on how to manage your finances. There may be options available to you such as debt management plan, IVA or Bankruptcy.

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