Brits are becoming increasingly dependent on their credit cards to make ends meet each month, new research has found.
Some 2.6 million credit cardholders plan to spend more on their plastic this year than last, shelling out an average of £318 in January alone.
According the Post Office, over 10 million adults will use their credit card in the first part of the year to cover basic day-to-day purchases.
With the research showing that almost half (45%) of all credit cardholders do not repay their debt in full each month, this means that millions of Brits are actually going deeper into debt just to pay for essentials like groceries.
Interestingly, the Post Office says 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.
Recession leaves some with little choice
"In the current climate, many people have little choice but to rely on their credit cards to fund more expensive purchases,” says Post Office head of lending, Az Alibhai.
“However, what is worrying is the trend for people to continue to rely on their cards for basic day-to-day purchases.
“This can be expensive if you only pay off the minimum amount on your credit card each month and have a high rate of interest."
Use plastic wisely
With the average APR on credit cards now an eye-watering 18%, it’s clear that debt can quickly spiral out of control.
The best way to keep plastic debt in check is to avoid interest altogether. Do this by making use of 0% balance transfer credit cards for existing debt, or new purchase cards for upcoming expenditure.
However, for those who go into debt to fund daily purchases, these cards will merely serve as a stop-gap solution.
Rather, you need to devise a plan to shore up your finances and reduce your monthly bills to a more manageable level.
To help you in this regard, take a look at our budgeting articles, as well as our 10 tips to reduce your outlays.
