If you read the newspapers, it's hard to avoid the pundits of doom. We've become a nation of debtors, they say, and the road to the debtors prison is paved with plastic. Credit card debt is at an all time high, and we're sinking further and further behind.
Is it really true, though? The statistics flung about seem to support the contention that credit cards are sinking us as a nation. But statistics can be read in many different ways. Even the statistics that people choose to quote are telling. For instance, there's the oft quoted statistic that there are 4 credit cards issued for every adult in the UK. That is to say, there are four times as many credit cards issued in the UK as there are adults. At the same time, there are approximately 30% of adults in the UK who have one or no credit cards at all. That means that some people must have considerably more than four credit cards, no?
The average amount of credit card debt per family in the UK is over £20,000. That's a grim statistic - especially if it means that most people in the UK are over £20,000 in debt on credit cards alone. Average is a misleading word, though. Let's take three typical British families. The Blakes have one credit card, and while they often run the balance up to £300, they generally pay it off at the end of the month. The Marks owe over £50,000 spread out over five credit cards. The Danvers just recently whacked a holiday cruise for the entire family onto the credit card to the tune of £8000 - which will be paid off month by month and be paid off completely in a year. The three families have an average credit card debt of just under £20,000 - but of the three, only one, the Marks, have credit card debt that appears to be unmanageable. If instead of averages, you were to look at the mean amount of credit card debt in the UK, you see a far different picture of credit card debt in the UK.
In 2005, consumers in the UK charged more on their credit cards than they paid for in cash. For the first time since the first credit cards were introduced to the UK in the mid 1960s, we are as likely to whack it onto our credit cards as we are to turn to friends for a loan for a few days. Our national credit card debt is certainly higher than it ever has been, but it is also of a different kind of debt. The purchases made on plastic these days are as likely to be for day to day expenses that will be repaid within thirty days as they are to be larger purchases which will incur interest charges.
At good comparison websites, you can learn more about credit cards, their uses and how to compare and apply for credit cards. You can compare all the options side by side and even apply online.
Jon Francis has been involved in various areas with the world of finance and has a keen eye for a bargin! He has an in-depth knowledge of the credit card UK market and now helps others get the best from a credit card. For more information visit moneyeverything.com. |
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