As part of their credit card statistics report, the financial experts at money.co.uk investigated the spending habits of UK credit card holders to reveal how Brits are changing their spending habits to cope with the increased cost of living.
New research found that 1 in 4 Brits said that the cost of living is the main reason they use their credit cards, as they don’t have enough money in their current account to cover monthly expenses.
Over a third of credit card holders aged between 25-34 reported this as their main reason for credit card use. They’re followed by those between 35-44 years old and those aged 45-54.
When broken down per region, cardholders in Northern Ireland feel the need to spread the cost of living the most – 37% of Northern Irish reported this as their main reason for credit card use. This is followed by the East Midlands, with a third of respondents stating this, and Greater London where over 1 in 4 reported cost of living as their main credit card use.
Greater London is in the most credit card debt
Owing approximately £3,846 per card holder, the credit card stats report can reveal that card users in Greater London are in the most credit card debt. This is £236 more than cardholders in Yorkshire and the Humber who place second owing £3,610 on average, and £275 more than East of England who place third (£3,571). Credit card debt in Greater London is also a fifth greater than the UK’s national average of £3,213 per card holder.
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Scottish cardholders currently owe the least in credit at approximately £2,229 per user. This is £1,617 less than Greater London and 30% below the UK’s national average (£3,213). The South East owe the second least at £2,750 per card holder (14% below average), followed by the West Midlands at £2,695 (7% below average).
Brits aged 18-24 are in 15% less debt than those aged 35-44
Despite owing 15% less to their card providers than those aged 35-44, 18-24-year-olds pay 65% more off their credit cards each month in comparison. However, almost a fifth of 18-24-year-olds have had to ask for their credit limit to be increased, compared to 16.50% of 35-44-year-olds.
Salman Haqqi, personal finance expert at money.co.uk, advises on how to use credit cards wisely during the cost of living crisis:
“Credit cards can offer a flexible and convenient way to borrow and spread the cost of day-to-day spending, so knowing how to manage your credit card can help you get the most out of it and save money.
The key to making the most of a credit card is only borrowing what you can afford to repay. To avoid increasing debt, always pay your credit card bill on time. Missing a credit card payment can be expensive, as you’ll likely incur late fees. A missed payment can damage your credit score too, making it more difficult and costly to borrow in the future.”
Most importantly, check your credit card balance regularly. Monitoring how much you have spent is key so that you never borrow more than you can afford. Most credit card providers now offer a smartphone app where you can seamlessly check your balance and make payments.”