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"Many still paying bills on credit cards"

By Reno | June 3rd, 2010 | General

Over the past couple of years a rising number of consumers have turned to their credit cards in order to pay for essentials such as food, bills, everyday necessities, and even mortgage or rent payments. The global financial crisis and the recession resulted in many people struggling to make ends meet financially, which is why so many ended up turning to their credit cards.

A recent report has shown that there are still many people that are using their credit cards to make bill payments, with one in seven cardholders in the UK thought to be using their credit cards to pay bills on a regular basis. The report also showed that worryingly another 7 percent of cardholders are using their cards to take cash out from cash machines, even though the rate of interest charged on cash transactions is extortionate.

According to the data around 43 percent of cardholders use their cards to pay for things such as grocery shopping, 38 percent use them to pay for their petrol, and around 50 percent use them to make larger, more expensive purchases.     

Whilst some credit card holders repay their balances in full every month, which means that they will not be charged any interest on purchases, there are many others who only make minimum or relatively small repayments on their cards, and these are the people that will suffer financially for using their cards on a regular basis.

Some officials believe, however, that some people may be using their credit cards more because they have cash back credit cards, and by using the card on a regular basis and then repaying the balance in full they are able to avoid paying interest on their credit cards debts whilst earning rewards for spending on the card.

Tags: interest rates, credit card, Credit Cards, finance, Credit Cards

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