The world-wide financial crash revealed just how much British shoppers are in love with their credit cards – an unprecedented amount of debt was accumulated on UK credit cards, never mind the mortgage and other loan markets.
According to a recent survey conducted by credit reference agents Equifax, shoppers’ spending habits are influenced by their star signs. While Capricorns are apparently the worst culprits for accumulating debts of over ?5,000 and then struggling to pay them back, Aries are careful with their money and hardly ever get into financial trouble on their UK credit cards
Public holidays like Christmas and the long weekends in spring and summer are also too much of a temptation, when it comes to the average UK credit card holder. With “cheap” city break offers galore, it is hard not to use the credit card, when you’ve already had to do without the annual two week holiday thanks to a reduced family budget. UK shops in particular know how to exploit this weakness – special offers on anything from food, drink, shoes and gardening equipment like BBQs suddenly spring up everywhere, luring shoppers into spending what they haven’t really got.
This type of behaviour is virtually unheard of in Germany, where far fewer people actually have a credit card and where paying by debit card for your weekly groceries is a relatively new thing. With far fewer households having a PC or laptop at home, there’s less temptation to go on an online spending spree. Unlike UK credit card holders, who usually pay by card at their supermarket checkout, their German counterpart will pay by cash instead, thus always knowing, how much is left in their bank account for them to spend.
A recent governmental study conducted in Scotland revealed that 1 in 3 Scottish people have outstanding credit card debts. The study looks at household spending habits
According to the survey households with an overall income of ?30,000 plus were least likely to have no outstanding credit card debts (50%), while households with an income of ?10,000 or less where the most likely to owe anything on their credit cards (78%). The latter probably reflects the fact that they are far less likely to have obtained a credit card in the first place, due to poor credit scoring with potential UK lenders.
Despite high inflation and continued unemployment, holders of UK credit cards continue to shop with money they haven’t really got. A significant rise in utility bills may also be responsible for people having to use their credit cards far more – it stretches family budgets just that little bit further every month.
As long as the outstanding balance is paid off in full and on time, things are rosy. Trouble starts, when a credit card holder falls ill and cannot work for a longer period of time or loses his or her job. Falling behind with just one payment can have serious consequences for UK credit card holders.