Credit cards ‘used to control finances’
Written by Jai Borchgrevink on February 7, 2012.
Many Brits may be using a credit card to help them ease the strain on their finances in the harsh economic climate.However, some might still find they are struggling with their finances and allowing debt to mount up.Almost one in ten (nine per cent) of the population are concerned they are in this position, according to new research from Gocompare.com.It could still be possible for these individuals to resolve their situation, as dealing with credit card repayments is not an unusual position – 26 per cent of UK adults expect they will be handling bills throughout the year.Indeed, 22 per cent of respondents said one of their main concerns in 2012 was how they are going to address the rising cost of living while other costs – such as utility bills – are rising.An estimated 35 per cent claimed they are looking at ways in which they can reduce their debt and complete their credit card repayments.Setting a strict budget plan and looking over all outgoings is one way in which this can be achieved.Furthermore, it is important the matter is addressed as soon as possible, as interest – when allowed to grow out of control – can exacerbate the situation.It is recommended individuals repay more than the minimum sum wherever possible in order to avoid this becoming an issue.This can also help build a credit rating, as it will demonstrate to future lenders the person is able to manage their finances effectively and is a reliable borrower even when times are tough.Credit cards, when used properly, can be an effective budgeting tool for people looking to keep their finances in check.Other personal finance experts agree this is the case, particularly as the Bank of England is maintaining low rates of interest to incentivise spending, which is said to be beneficial to borrowers and lenders alike.
People who use credit cards to cover some of their outgoings may be more successful in sticking to a budget plan than other Brits.Editor of CashQuestions.com Annie Shaw explained this is one of the key benefits to using these financial products, noting there are many more.She added there is an increased range of protection for individuals, including assurance against default under the terms of the Consumer Credit Act.One example cited by the expert was section 75 of this scheme, which enables people to recover any money lost when ordering products from a company that may go bust.”That is a very good reason to use your credit card, even if you have got loads of money in the bank,” Ms Shaw remarked.Furthermore, the low interest rate being maintained by the Bank of England incentivises spending, which communications manager at the Council of Mortgage Lenders Bernard Clarke recently claimed is beneficial to both borrowers and lenders.
Christmas shoppers who are hitting the shops with a credit card to buy gifts for their friends and family are more likely to be spending money on women than they are on men, new research has revealed.A survey conducted by insurance provider More Than found male and female Brits both plan on spending more money on grandmothers, mothers, mother-in-laws and sisters than their male counterparts.Children will still be prioritised above all others, with the national average spent on kids standing at £104.Sons and daughters in the south-east may only receive £84 worth of presents, but those in the north-east will receive almost double this if their mums and dads budget for the regional average of £164 on their offspring.Pets will not be left out of the celebrations as around £16 worth of toys and treats will be waiting under the tree for the dog to enjoy.”Even with the squeeze on family budgets, people are clearly still investing a lot of time and money into selecting the perfect gifts for their nearest and dearest,” commented head of home insurance for More Than Matt Pernet.However, if individuals wish to avoid financial difficulties such as a bad credit rating when the festive period is over, they ought to take care with their finances and not spend beyond their means.Head of banking at price comparison site MoneySupermarket.com Kevin Mountford advised people “keep a sensible head under their Santa hat”.Research conducted by his organisation found one in four UK adults have set a budget, but expect to exceed its limit.Despite tight budgets and money concerns exacerbated by the current economic climate, many will still be helping maintain a festive community sprit.This is because the More Than study indicated a third expect to give their childs teacher a present to express their gratitude for their work and 23 per cent of Brits intend to visit their neighbours