Millions set to rely on credit for day-to-day expenses

2.6 million credit card users intend to spend more on their cards in 2009 than 2008.

2.6 million credit card users intend to spend more on their cards in 2009 than 2008.

Millions of consumers are still reliant on credit for day-to-day living costs in 2009 according to the Post Office Credit Card’s latest Consumer Credit Report. The survey reveals over 10 million adults (32%) intend to use their credit card in the first part of the year for daily purchases such as grocery shopping, reflecting the extent to which the credit crunch has impacted on people’s finances over the last year.

The research shows that 2.6 million people intend to spend even more on their credit cards than last year, with an average spend in January of £318.

The trend of relying on credit to fund day-to-day spending is not unique to one particular social group and is affecting credit card holders across the UK. Worryingly, the trend looks set to continue, with 4.1 million card holders planning to spend less on each purchase but use their cards more frequently for general living costs throughout the whole of 2009.

With almost half of all credit card holders (45%) not planning to pay off their credit card bills in full each month, the Post Office is urging anyone reliant on credit to ensure they are on the best possible deal to avoid over-paying for money borrowed on credit cards.

This is particularly important given half of workers (47%) in this country are concerned about losing their job. This makes such heavy reliance on debt for basic day-to-day living costs even more of an issue.

As well as zero per cent on balance transfers for the first 12 months and zero per cent on purchases, for the first three months Post Office Credit Card offers no overseas commission charges. In addition, it offers an extra zero per cent on new balance transfers for five months on the card holder’s first and second anniversary after taking out the card.

Even after the promotional periods, the Post Office credit card still offers a competitive interest rate of 16.9% APR typical variable.