Consumers spending more on credit cards but debt declining
Consumers spending more on credit cards but debt declining
- Friday, 8 October 2010Consumers are starting to make more purchases on credit cards but the amount of outstanding debt has declined.
This suggests that people are being more careful with their borrowing and are starting to pay off their
credit card debt.
According to the British Banking Association, outstanding balances on credit cards amounted to £64.1 billion in August last year compared to £60.7 billion in August 2010.
This is despite the number of credit card purchases increasing to 173 million in August compared to 169 million in July.
Chris Griffiths, head of credit cards at confused.com, said: "Customers should remember that any interest accrued on an outstanding balance and late payment charges may lessen the value of any rewards earned, so a direct debit should be set up to ensure they make at least the minimum repayment each month."
Research from the price comparison site found that UK consumers are wasting £150 million a year on charges for overdue credit card payments.
The Consumer Credit Counselling Service recently suggested that making the minimum repayments on credit cards each month could cost more in the long-run.
The interest accrued could help contribute to
debt problems.

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