Third of credit card holders 'use it to cover essentials'

More than a third of people with credit cards - equivalent to around 12 million people - will use their credit card to help cover their essential living costs this month, according to research by the Post Office.

The research found that 42% will use their card for grocery shopping, while 35% will use it for day-to-day purchases.

This perhaps isn't that unusual, given that a lot of people like the convenience of spending on credit card and paying it back at the end of the month. However, it's a more serious situation for the many people who spend on credit card because their regular income doesn't cover their outgoings.

Indeed, the research showed that 8% will use their card to pay off Christmas debts, while 7% will use it for domestic bills - both potential signs that people have overstretched their finances.

25% say they will use their card to book a holiday. This can actually be very sensible as long as the borrower can afford to repay it on time, because credit card purchases offer refunds in the event of cancellations. However, there will also be those who maybe haven't considered how they will pay it back.

An expert at debt management company Gregory Pennington commented: "Using a credit card does not necessarily indicate a problem, and in fact the vast majority of people who use one are perfectly able to pay it back in good time.

"However, if you find you have to use your credit card to make ends meet, that could be the sign of a bigger problem. Bear in mind that a sudden change in circumstances can turn affordable debts into unaffordable ones very quickly.

"If you have credit card debt and you haven't really thought about how to repay it, it's a good idea to start planning out your repayments over the next few months. If you're still unsure about when you can repay it, then it may be time to get expert help."

Further Reading:

Joel Stanier

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