Consumers clear their credit card balances

A survey has discovered that more than half of credit card users do pay
off their balance in full each month, and found that having the
added security of plastic means that they use up to 60 days of interest
free payments to accrue airmiles, cashback or even benefit charities.

Another 14 per cent of credit card users pay in irregular lump-sums - so swinging from a rising balance, to clearing the card and
being in credit.

Approximately one in twelve credit card holders transfer debts between
several cards to take advantage of interest free periods.

James Caldwell, director at Fairinvestment.co.uk, says: "With the
encroaching credit crunch being felt by consumers through the price of
credit and the bills that come through their front door, it is uplifting to see that more than half of credit card customers can still afford to clear their balance each month and are not relying on their credit card for day-to-day essentials, getting further and further into debt.

"Borrowing has become increasingly difficult under the dark cloud of the global credit crunch, with rates going up and lending criteria becoming tighter. If the 13 per cent of people that ignore their credit card bills in the hope that the debt will just go away instead
consider ways of paying at least the minimum amount as soon as possible, such as cutting down on other expenditures, they could avoid incurring charges for missing payments and damaging their credit rating in the process."

March 18^th 2008

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