Holiday debt prompts credit card spending?

By UK CreditCards.com

There will be a big rise in credit card spending this month, as households across the UK struggle to cope with everyday costs following the expensive festive season.

According to the Post Office, more than 2 million adults expect to spend more on plastic in January 2012 than they did during the same month last year. card-swipe

The Post Office's latest annual Consumer Credit Report reveals that a staggering 12 million people -- 36% of all credit card holders -- anticipate they will need to use their credit cards to pay for everyday living costs this month.

Others (32%) will be utilising plastic to make the most of the January bargains on offer in the next few weeks, while 22% intend to get a head start on the summer rush and book a holiday.

Getting the best deal on day-to-day items

With such a scenario unfolding, it is important for consumers to compare credit cards to ensure they are not paying more than they need to.

There is currently a range of cards on the market offering 0% annual percentage rate (APR) introductory periods on all purchases. During the 0% period, spenders will not be charged any interest on their initial purchases.

These cards often have 0% introductory offers on balance transfers as well, making them ideal if you want to consolidate all your higher-interest rate debt onto one credit card to help keep on top of the repayments. It is important to remember, though, that most of these cards will have balance transfer fees, usually in the region of 3% of the transferred balance, so do the math first to see if it makes financial sense to make the switch.

Consolidating to one card

Transferring multiple balances to a single card will be particularly relevant to men, as the Post Office research indicated that they are more likely than women to possess three or more credit cards: 21% as opposed to 17%. Those in the East of England might also benefit. They are the most likely to have multiple cards, with more than a quarter (27%) owning at least three.

"People with debts spread across different cards may benefit from consolidating their debts onto one card to make them easier to manage and to further reduce the amount of interest being paid," said Az Alibhai, head of credit cards at the Post Office.

 

See related: One in three could face Christmas debt hangover in 2012; How to negotiate a lower credit card APR

Published: 9 January 2012