The UK embraces credit cards

Credit cards

The amount we Brits spend on our credit cards is increasing. That’s according to new statistics released by the British Banking Association, who have revealed that £7.1 billion was spent on our cards during the month of October in this country – that’s an increase of over 5 per cent compared to the same month in the previous year.

The good news is that we’re getting much better at handling our plastic than ever before too – to go with increased use by British people, the amount of debt has gone down. Even though we borrowed £7.1 billion, we actually paid off £7.4 billion in the same time period, which would seem to suggest that we’re getting much better at budgeting and using our cards properly.

Will Becker, the CEO of credit card comparison site TotallyMoney.com, said: “It is great to see that the nation is embracing its plastic…given the free consumer protection credit cards offer and the rewards available, more people need to switch their spending from debit to credit cards.”

Credit cards are increasingly competitive with the benefits they’re offering too – along with cash back credit cards which reward consumers for spending money on their plastic; some cards offer things like air miles; charitable donations; and more. These benefits are just not available on purchases made using a debit card, so people are still spending more money on their credit cards to see the extra profits.

Along with Section 75 – a piece of legislation that protects consumers making purchases valued at over £100 using their credit cards – there’s increasing numbers of incentives for Brits to make more purchases using their plastic.

“It’s time people woke up to the wonders of credit cards and changed their spending habits,” adds Becker.

5 thoughts on “The UK embraces credit cards”

  1. I use almost only cards, except here it has proven a bit more complicated… I hope UK cards get better, mine has 0% commission on withdrawal abroad which is awesome but no rewards. Could they sprinkle airmiles on top? pretty please?

  2. Perhaps people are learning how to budget in the shorter term.  I use a CC for a lot of purchases and pay off in total monthly.  I even make sure that any big buys are after the next statement day so I get max free credit.  It’s rare I spend more than £300 per month but that money is better in my bank account than in the bank’s greedy clutch.

    I just hope that the increase is not a sign of desperation for some folk who can’t make ends meet! 

  3. I have just one credit card and it has been my dirty little secret ever since I got it years ago. Will probably shut it down or lower the limit just to use it for flight payments etc. I’m sort of against spending the money I don’t have yet on basic day-to-day consumption…

    1. @Chris

      It’s up to you but just discipline yourself to pay a card off in full or at least to be careful with it. Credit cards can be very useful to smooth cash flow, particularly in an emergency. By paying it off every month, you pay no interest yet you pay interest on money that is owed to you. When you do a days work but are not paid until the end of the month (worse, after 90 days if you are self-employed sometimes), your employer or whoever owes you money. If you need a tool, food or some petrol for the car or something like that, you need to have too much money just to be able to survive. So using a credit card wisely can help.

  4. I’d rather keep a cash reserve to draw on instead of relying on a credit card. I’ve done the “I’ll use the card now when I’m short on cash and pay it off later.” Something always comes up to keep you from paying that balance off. Then you become like me, paying off today food that you ate 10 years ago!

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