Brits 'rely on credit cards for day-to-day essentials'

04/02/2009

Worrying new credit card data was released by the Post Office this morning.

The organization said that, despite the credit crunch and rising unemployment, 2.6 million Brits are planning to use their cards more this year than they did in 2008.

Building high-interest debts as the economy goes into reverse is risky for consumers, who might face a fall in income due to job loss in the recession and might therefore find it tough to make their repayments.

According to the Post Office, a total of ten million people are planning to use their credit card to buy essentials such as groceries - another potentially risky move.

Kevin Still, EuroDebt director, commented: "Using credit cards as a fundamental part of your monthly budget becomes a habit and leads to the 'robbing Peter to pay Paul' syndrome, which many credit card companies are clamping down, some through enormous increases in their interest rates.

"Most card issuers have set minimum monthly payments at or slightly above their monthly rate of interest. The general effect if you are using your cards for day-to-day expenditure items like the supermarket shop is that you will go further backwards each month."

Tags; Budgeting Advice, Recent Graduate Debt, Young Family Finances, Retirement Money Problems,

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