2 in 5 credit card users use their card more during lockdown
Only 1 in 6 uses their card less
For some, the lack of vacations and the reduced need for big ticket items meant that during the lockdown period, there was little to buy with a credit card. Indeed, official figures for July show that, overall, the value of transactions has fallen by 25% year over year.
However, new research indicates that not everyone may have used their card less during the lockdown. The study, from personal finance comparison site finder.com, found that more than 2 in 5 (43%) credit card holders were and continue to use their credit cards more than before the lockdown began. in March.
Another study from finder.com found that more than a third of Britons (36%) had to use up their savings during the lockdown, showing Britain’s need for access to additional cash and possibly prompting many more to use their credit cards.
Not only have the Brits turned to credit cards, they have also used buy now, pay later services during the foreclosure, with 19% of shoppers saying they did in a previous finder.com survey.
These factors, coupled with payment holidays, contributed to the UK public’s £ 1,684 billion debt at the end of August 2020, according to official figures. This represents an increase of £ 26.2 billion per year from the August 2019 figure and an additional £ 498 per adult on average.
Is Britain Divided?
In contrast, nearly one in six people (16%) use their credit card less, with 42% of those people saying their reduced need for consumer items, such as clothing, is the main reason.
The second main reason was spending less on socializing which meant less credit was needed, while not having to pay for vacations was the third most common cause.
For many of these people, lower spending translated into foreclosure savings. A previous study by finder.com found that Brits who work and work from home save an average of £ 99 per foreclosure week by not socializing or going to the office.
The full article, Playing for Good: The Credit Card Industry’s Struggle for Customers, includes expert commentary from industry leaders and can be viewed here.
Credit card advice from Chris Lilly, chief editor and credit specialist at finder.com, is:
“Credit cards can be useful when used wisely. They can help you improve and develop your credit score, spread the cost of a large purchase, and provide protection on purchases over £ 100.
“Ultimately, what you want to use your credit card for will help you determine what type of credit card to use. If you are able to pay off the balance in full each month, the interest rates may not be as great as you can take advantage of the interest-free period. Therefore, choose a card that offers incentives that best suit your needs, such as cash back.
“If you’re looking to use a credit card to spread the cost of shopping, you’ll usually have to pay interest. So choosing a card with a lower interest rate is more suitable for these people.
“Plus, for those who are really struggling with debt, a new credit card may not be the best option. If you are in this position, head to the money counseling service who can help you find other ways to manage your debt.
“Start by figuring out how much you can pay off each month so you know the maximum amount you can accumulate on your card. The easiest way to do this is to create a budget, apps like Yolt and Emma have plenty of features that let you manage multiple accounts and set goals to help you stay on budget. This is the easiest way to avoid falling behind on repayments.
“If you already have credit card debt, set your budget so that you can make the minimum payments every month, it’s even better if you can pay off more than that amount because you’ll pay off your debt faster and lose less money. ‘interest.
“If you can’t make your minimum payment, let your supplier know, as they may be able to withhold your payments until you are back on your financial footing. “
Finder tasked Onepoll from November 2-4 to conduct a nationally representative survey of adults aged 18 and over. A total of 2,000 people were surveyed across Britain, with representative quotas by gender, age and region
Other data sources: UK Finance and The Money Charity