Although introduced relatively recently credit cards have become firmly entrenched in the average British household, and are used for a wide variety of spending from the weekly shop to booking a holiday. Their flexibility and ease of use have made them a popular alternative to carrying around cash and increased security measures such as the new chip and pin technology help people feel more secure in using them.
Credit cards are also a great way for generating extra cash, something that many people living in Britain are looking to do, whilst the economy goes through a down turn. This extra cash can be used to pay increasing household bills or for luxuries that otherwise would not be affordable. The interest rates on credit cards are competitive and many offer interest free deals in order to entice customers, so it is no wonder that more and more British consumers are deciding to get one.
But it seems people are not just stopping at one card. Cheap introductory deals coupled with the increase in household bills is encouraging people to take out more credit in order to get by. Research by MoneyExpert.com has found that over three million people living in Britain now own at least five or more credit cards with 1.8 of them owning more than that. Applications for new credit cards still remain high with twenty-eight percent of Britons applying for a new card in the last twelve months. It would appear that nowadays people are requiring more credit to stay afloat so they are applying for more credit cards. However whilst obtaining the cards might be relatively easy, actually making the repayments on four or five cards could start to become more difficult.
For some people juggling a high number of credit cards makes financial sense. Transferring high balances onto cheap or zero percent interest rate can save consumers money. With so many deals on the market there is still a lot of choice for the consumer, something which has dramatically declined in other financial markets such as mortgages. Problems start to arise however when people cannot make the minimum monthly repayments. Once this happens, it can be a slippery slope to bankruptcy if a suitable solution is not found. Some people who have missed payments have found that their credit ratings have been adversely affected and that it becomes difficult for them to obtain another credit card. What is being found in these cases is that there is an alarming trend for people to falsify their details on credit card applications in order to secure another card.? A study by Apacs, found that credit card fraud had increased by 25 percent in the UK. Experts believe that this increase in fraudulent applicants hides the
worrying fact that more people are getting into debt, which is going to lead to further negative implications for the British economy. Overall credit card debt if managed cleverly can provide a way for people to handle their financial situations well. On the other hand, it could encourage people to spend more than they have and result in further debt problems.
