According to the latest Post Office Consumer Credit Report, over 30% of people spent the last month relying on their credit cards to cover their day to day living costs.
It seems 10% needed to use their credit cards to cover the long gap between the December and January pay day and another 10% simply to cover their overspend at Christmas.
Of concern though is that around a third say they are relying on their credit cards every month to cover their day to day expenses.
On a positive, over half of the users expect to pay their bill off in full each month and thereby avoid having to pay interest charges, which can otherwise add up and significantly increase their overall debt. However, 7% say they will take more than 3 years to clear their credit card debt.
Around 40% acknowledge they need to budget more carefully.
Post Office Head of Credit Cards Az Alibhai said: “January has been a tight month for many of us, especially with the long wait until pay day, and we can see that many people are falling back on credit cards to ease the costs of day to day living. If the debt is managed sensibly and paid off quickly, this can be very effective. However, if you don’t pay off the bill in full, it can be a pricey way to fund daily purchases.
“With many people expecting to increase their credit card spend this year and to help customers manage their finances during the ongoing post-Christmas pinch, we urge cardholders to check out their interest charges and consider switching to a deal with a zero per cent offer on purchases and balance transfers.”
A number of credit cards offer 0% interest on balance transfers and 0% on new purchases for a period of time, including the Post Office Credit Card for example. With this card, customers also benefit from 0% on new balance transfers for five months for the second and third year as well as no cash advance or handling fee when purchasing foreign currency (either online or in a Post Office branch).
To find out more, go to the Post Office website, call 08457 22 33 44 or visit your local Post Office branch.