ArticleSubject.com » Finance » Debt-consolidation » Consumer Spending Behavior Changes, In Credit Crunch Hit UK Families

Consumer Spending Behavior Changes, In Credit Crunch Hit UK Families

by: Amy Whittingham
Total views: 5
Word Count: 399

To stay out of the red, buyers are paying with cash and using store cards more often than they did before. Department stores such as M&S and Debenhams have seen a surge in cash and store card sales. 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 revealed that consumer confidence slipped lower than it has been since the recession of 1990, largely due to dropping house prices and increasing household expenses. Roughly 2 million British citizens have had their credit card limits lowered during 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. Everyone has their own ideas about borrowing, but whether you are a cautious cash-only spender or you don't mind resorting to using credit cards, you should still be wary of using a store credit card unless it is a last resort due to high cost of interest associated with them.

Average store cards carry a rate of 22% and can get as high as 31% This is particularly high when compared to the 17 per cent that is usually charged by 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. With the possible exception of doorstep and payday loans, credit cards are one of the costliest ways to borrow money and should not be used to pay the mortgage or other loans. This is a negative foretelling of the events taking place in household finances in the 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. In you must use your card in a pinch, don't worry, it is a reasonable measure until such time as you have recovered financially. It couldn't aggravate the situation. Credit card debt in not secured by property, but if the rent or mortgage isn't paid, you'll find yourself with nowhere to live in only a few months.

Click here to join VC Affiliates - Fantastic revenue share, CPA and Hybrid Structures available!

About the Author

Amy is a part-time columnist who pens occasional pieces on financial issues, whilst working on Bad Credit issues for people with adverse credit histories.  

More Articles from: Debt Consolidation