Millions relying on credit
Millions of consumers are still reliant on credit for day-to-day living costs in 2009 according to the Post Office latest Consumer Credit Report.
The survey reveals over 10 million adults intend to use their credit card in the first part of the year for daily purchases such as grocery shopping, reflecting the extent to which the credit crunch has impacted on people’s finances over the last year.
The research shows that 2.6 million people intend to spend even more on their credit cards than last year, with an average spend in January of £318. The trend of relying on credit to fund day-to-day spending is not unique to one particular social group and is affecting credit card holders across the UK.
Worryingly, the trend looks set to continue, with 4.1 million card holders planning to spend less on each purchase but use their cards more frequently for general living costs throughout the whole of 2009.
Post Office head of lending Az Alibhai said: “In the current climate, many people have little choice but to rely on their credit cards to fund more expensive purchases. However, what is worrying, is the trend for people to continue to rely on their cards for basic day-to-day purchases, which could be expensive if you only pay off the minimum amount on your credit card each month and have a high rate of interest.”