New research has been conducted by the popular website MoneySupermarket.com which has shown that since the financial recession began more people have been using credit in order to meet their financial commitments. The survey showed that the trend for people who had credit items, such as a credit card, to borrow more money was around 10 percent since the recession began.
The research also showed that around 34 million people in the country use some sort of financial credit product. 10 percent of these people were showed to be more likely to use this sort of credit facility since the financial crisis began back in 2008.
It is also thought that people are borrowing more money on credit because the borrowing rates are much lower than they have been in previous years. People have even taken to start using credit to pay for things instead of dipping into their savings.
However, since the recession began there has also been a trend in the opposite direction as more people have become wary of the financial implications of using a credit card. Since the financial crisis began, over one in every three people stated that they are using their credit card less than they have previously.
While a credit card can be useful facility, or a trap into debt, there is no question that it does have certain benefits. Many credit cards offer a cashback amount for the amount you spend on the card and this can earn card users up to 5 percent of everything they buy.
An example of the cashback offer is that offered by American Express on their Platinum Card. If you spend £1000 a month on the card and then count all the cashback you have been given over the year, you would earn around £225. Furthermore, credit cards are able to offer you relief if you are in debt on another card.
By taking out a new credit card you might be entitled to an interest-free period into which you can transfer your debt. This will significantly reduce your monthly payments so you can pay off the previous card without accumulating more debt.
The head of banking for the website is Kevin Mountford adheres commented, “For many people, before the financial crisis began, credit was something that was very easy to obtain. However, since the crisis, people have found themselves in difficulty and there have been more restrained in their borrowing. Just because people don’t want to borrow, doesn’t mean they should make themselves aware of the various benefits that having a credit card offer them.
“As well as offering great benefits like cashback, a credit card can also be a fantastic way to rebuild your credit history that has been damaged in the past. By using your credit card responsibly, your credit rating will improve, and you will find it easier to get financial products in the future, such as a mortgage.
“However, whenever a customer takes out a credit card they should be very careful to read all the terms and conditions carefully. These products will become expensive if you are unsure about how you have to pay back the money. Make yourself fully aware of any details before you take out a credit card.”