To avoid getting into too much debt, people are using cash and store cards more frequently. Retail establishments such as M&S and Debenhams have reported more cash and store card purchases. Stores are seeing a reduction in charge card usage, and it is believed that shoppers have started using them for living expenses such as utilities and rent.
A Gfk NOP poll raises the alarm that consumer confidence plummeted to a 1990 recession level, as the real estate market continues to dry up and household expenses continue to soar. Nearly two million British citizens have experienced credit card limit decreases in the past six months.
Store credit cards charge some of the highest interest rates, so we can conclude that consumers are hurting financially when their usage of them increases. Charging purchases to a store credit card would be discouraged unless it is your only choice as someone who is cautious about spending money feels completely different than someone who is financially strapped and feels the need to resort to higher cost forms of credit that are available.
The interest rate for store cards can be as high as 31 percent, the average being 22 percent. This is high when compared with 17 per cent on credit cards. According to a poll conducted last week, approximately four million people pay their rent or mortgage with a credit card, which availed up to one million pounds last year. Aside from payday and doorstep loans, using credit cards to pay loans or mortages is more costly. This is a bad sign of what is happening in household finances activities in UK.
While it may go against your better judgment and appear to place you at a disadvantage, if you are in dire risk of losing your home, it actually makes sense. First, seek the guidance of Citizens Advice, you don’t want to miss aid that you are eligible for. If you do have to use your card in an emergency, don’t feel guilty, it might be the best way to buy time until you regain control. It couldn't aggravate the situation. Debt on your card is not secured by property but if you don’t pay the rent or mortgage, you could be homeless in a matter of months.
