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Britons box clever with credit cards

Britons box clever with credit cards

Category: Credit cards

Updated: 06/12/2010
First Published: 06/12/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Consumers are increasingly boxing clever when it comes to their credit cards, new figures have revealed.

Statistics from the British Bankers' Association (BBA) show that the number of people using their plastic to get cash advances fell by 18% in the 12 months to October.

In addition, the average amount people are drawing out using their credit cards has fallen by 21% to £136.

Using credit cards to draw out cash is not advised as withdrawals can be hit with high fees and interest.

There are three million less cards in issue now than there was a year ago, having fallen from 63 million to 60 million suggesting people are paying off their debts and shutting their accounts

It also appears that credit card holders in the UK are making a concerted effort to drive down their outstanding balances.

Consumers paid a collective £281 million off their credit cards in October.

It means that as a nation the amount we owe on credit cards – £60.4 billion – is at its lowest level since August 2004, with 30% of balances incurring no interest.

The figures suggest that many people are turning to 0% balance transfer cards in an effort to pay down their debt while not incurring any additional interest.

The average balance transfer in October was 7% higher than it was 12 months previously, at £2,200.

You can find the best 0% credit cards currently available at the Moneyfacts.co.uk Best Buy tables.

"The use of cards for purchases is seeing a slow trend increase over time," said David Dooks, statistics director for the BBA.

"But consumers regularly pay more than they spend, and cards are used much less to withdraw cash than they were a year ago."

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