Wednesday, January 31, 2007
Category:
Consolidation
In the first three months of 2007 card spending is predicted to rise by 68% say Morgan Stanley Card Index. This is compared to the same period last year and repayment figures are now at their highest since 1998.
This is compared to the same period last year and repayment figures are now at their highest since 1998. In the first quarter of 2007, Brits are planning to spend an average of £1,228 on credit cards compared to the £730 spent in the same period last year.
Spending is fuelled by cardholders’ comfort of using their cards for day to day purchases – more than half is used for essentials like groceries and petrol. Breaking the figures down, the main area of credit card spending in the new year is said to be on the home and car with £377 being the total set to spend. Groceries follow this at £341. Holidays and travel will also be a major area of spending in the first quarter as cardholders book their 2007 get aways.
Men are said to be bigger spenders on plastic and are set to fork out £1,393 compared to women’s £1,065 in the first quarter of 2007. Patrick Muir, marketing director, the Morgan Stanley Credit Card, commented, ‘The results of our research show an increased confidence in the use of credit cards as a financial aid. It is encouraging to see that people are using their cards sensibly, with credit card spending and repayment figures increasing in tandem. Cardholders are becoming increasingly clever when it comes to being rewarded for the purchases they make, and with a wide variety of reward schemes available, ranging from collecting points to cash back, spending on credit cards is fast becoming the most appealing way to pay when compared to other methods.’
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For those individuals who have several credit cards with high balances, they could consider consolidating these with a debt
consolidation loan. Repayable over a term of 5 to 25 years, it is important to remember that repaying borrowing over a longer term will increase overall interest charges. However, a debt consolidation loan will wrap several monthly repayments into one, lessening the confusion about what needs to be paid and when. This is because with a debt consolidation loan, borrowers will know the exact amount and date payment needs to be taken each month. When considering a debt consolidation loan as an option to pay off outstanding credit card debts, cardholders should be mindful of the temptation to continue spending on cards once balances are cleared. Move multiple debts into one place with a straightforward debt consolidation loan.
