A GfK NOP poll showed consumer confidence slipping lower than it has been since the recession of 1990 due to falling house prices and rising household expenses. Recently more than two million Brits have seen the limits on their ability to borrow on their credit card curtailed.
Store cards are one of the most expensive ways to borrow and increased usage demonstrates consumers were in financial trouble. You might not want to use a merchant’s credit card if you didn’t have to, and there’s a big difference between those who don’t want to pay by cash and others whose budgets are tight and who therefore have to use credit cards even if it means paying interest.
The interest rate for store cards can be as high as 31 percent, the average being 22 percent. If you compare with 17% on credit cards, it looks very high. According to a poll conducted last week, approximately four million people pay their rent or mortgage with a credit card, which availed up to one million pounds last year. Using credit cards to borrow money to pay loans and mortgage is actually more expensive except for the doorstep and payday loans. The UK is having problems with personal finance.
It doesn't seem like the best decision unless you are faced with losing your home. The first step is to use the help of Citizens Advice, it's important to not miss aid you are readily eligible for. If you do have to use your card in an emergency, don’t feel guilty, it might be the best way to buy time until you regain control. It can’t make things worse. Credit card debt in not secured by property, but if the rent or mortgage isn't paid, you'll find yourself with nowhere to live in only a few months.
Amy is a freelance writer who writes occasional articles on financial issues, whilst working on Bad Credit Repair for people with adverse credit histories.