A recent report has shown that many consumers in the UK are relying on their credit cards more and more, yet are continuing to spread repayments on the balance rather than trying to repay the balance in full each month. The series of recent interest rate rises has meant that many households have had to really tighten their belts, and many have had to rely far more heavily on credit in order to make ends meet financially, which has impacted upon the use of credit cards as well as on repayments on credit cards.

Credit is still on the increase in the UK, adding to the debt mountain that is causing so much concern, and with struggling homeowners having to repay far more on their variable rate mortgage each month because of the 1.25% rise in interest rates over the past year, the credit card has become a financial lifeline for many borrowers. However, households have had to cut back on their outgoings, which is why many people cannot afford to repay larger chunks off their credit card balance.

Those that are planning to spread the repayments on their credit cards are advised to ensure that they repay more than the minimum payments, as they could otherwise be repaying the debt for decades. It is also advisable to look at transferring credit card debts to a low rate life of balance transfer credit card or to a 0% balance transfer card, although there is usually a transfer fee of around 2% of the transferred balance on the latter.

One industry official stated that in light of increased repayments on mortgages and variable rate loans, an increasing number of consumers were having to turn to credit cards.

She stated: “Many of us use our borrowing as an acceptable means of maintaining our standard of living.”