- Friday, 28 May 2010Using credit cards to pay off bills and purchase everyday items is not an effective form of
debt management.
Moneysupermarket.com has found that almost five million consumers regularly use credit cards to pay off household bills and a further 2.5 million withdraw cash using their cards, which is potentially costing £90 million a year in interest.
A
debt management plan could be needed if cards are used for financial transactions, even online gambling, as interest rates can be high and amount to significant sums of money on top of the original debt.
Kevin Mountford, head of banking at moneysupermarket.com , said: "Used responsibly, credit cards can be an integral part of household budgeting but it's alarming to see so many people using their cards to pay for what should be everyday spending.
"If you are using a card in this way, and not paying off the full balance each month, then you really do need to review your circumstances, as this is the first sign of financial difficulty."
Over 55 per cent used their cards to purchase expensive items such as a TV or DVD player but 43 per cent are using them for grocery shopping and 38 per cent for buying petrol.
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Registered Office: 45 Clarendon Road, Watford WD17 1SZ
Consumer Credit Licence Number: 0580960