Credit cards Updated:
Consumers have been told they must shop around for the best credit card deals, after it was revealed millions are relying on credit to fund their day-to-day living costs.
More than 12 million adults intend to use their credit card in January for daily purchases such as grocery shopping, research from the Post Office has revealed, an eight per cent increase on last year.
The recession and additional time many people will have to wait for their January pay, especially if last month they were paid before Christmas, have been blamed for the rise in financial pressure being felt by individuals.
Around 2.6 million people expect they will end up spending more on their credit cards this January compared to January 2009.
Meanwhile, a further 3.3 million expect they will spend more on their credit cards overall in 2010, with three per cent planning to take out another credit card or increase their credit limit.
However, when it comes to repaying credit, the recession has also impacted consumer habits.
Almost half of all credit card holders (45 per cent) have no plans to pay off their credit card bills in full each month and six per cent will only pay off the minimum amount.
A further one in five (19 per cent) believe it will take them over a year to pay off their credit card debts.
"Whilst the recession has left many with no choice, these debts build up quickly if not paid off in full each month, and can be extremely costly over time when interest is added," said Az Alibhai, Post Office head of lending.
"For those reliant on credit it is still worth shopping around, especially if you have a debt on your card that charges a high APR. By taking advantage of any zero per cent features still available or by switching to a card that will charge you a lower rate of interest, you can pay your debt off more quickly and cost effectively."
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