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Three quarters of parents struggle to pay off monthly credit card balance

Three quarters of parents struggle to pay off monthly credit card balance
Matt Browning
Written By:
Matt Browning

Three quarters of households with children at home have struggled to pay off their monthly credit card balance in the past six months.

For a third of these borrowers, they struggled to repay the balance every month,  according to Compare the Market’s latest Money Action Index.

Overall, more than half of those who struggled (54%) said this was due to the rising cost of everyday expenditure, such as food shopping and fuel.

For three in 10 households with children, they have had to borrow money from their parents to help with bills in the past month, receiving an average £266.

It comes as more than eight in ten (85%) said they were paying more for energy, 61% are paying more for council tax, and 44% are paying more for car insurance. Seven in ten (70%) are now worried about higher food prices in the next year and 66% worry about winter energy bills.

However, more than half (55%) of households with children who are concerned about costs haven’t taken any steps to bolster their finances. 

Only 37% of these households have taken action to save money, which is an improvement from October 2022 when 63% of these households had not tried to improve their finances, despite costs continuing to rise.

Of those who had tried to improve their finances, 69% cut back on spending, 62% used less energy to keep their bills down, and 59% shopped at cheaper supermarkets. Four in ten (44%) reduced spending on hobbies and holidays while 26% switched providers.

The price comparison site said to combat rising prices, households could save up to £692 by switching car (£516) and home insurance (£176) through Compare the Market.  A third of customers could also save £186 by switching their broadband.

‘Higher energy bills are a major worry’

Ursula Gibbs, director at Compare the Market, said: “Rising costs are a concern for millions of households across the UK, with many struggling to afford their regular bills. As we head into winter, higher energy bills are a major worry. Lots of families with children at home are now having to rely on credit card borrowing for additional financial support. 

“During this difficult time, people must take the time to look for savings wherever they can and make sure they don’t pay more than they need to. Most households could save hundreds of pounds by shopping around for cheaper deals on their bills, such as car and home insurance, broadband, and credit cards.”