UK Opt for Debit over Credit Cards
The number of credit cards in circulation fell in 2010, new research shows, with consumers increasingly opting for debit cards instead.
Price Waterhouse Coopers (PWC) identified the number of credit cards fell by 1.5 million compared to 2009 and stand at their lowest levels since 2003.
The report suggests consumers are focused on paying off their debts and planning to save more, while lenders are more selective as to who they lend to as a result of the recession.
“There is strong evidence that the type of credit demanded by consumers is changing,” commented Richard Thompson, PWC partner.
“A great deal of progress has been made by lenders in improving the transparency of products, but consumers themselves need to ensure they understand what they are signing up for.”
The average unsecured credit on credit cards and personal loans has fallen by £500 over the last year, this is around £8,000 per household.
Forty one percent of consumers want to put money away compared to 35 percent at the end of 2009, with 70 percent of 18-24 year olds intending to save more which is more than double the proportion of over 45s.
The survey showed 40 percent expect their pay to be reduced or frozen in the coming year, another incentive to save.
Cashplus Premier Prepaid Card
A good alternative to a credit card is a prepaid credit card – the user loads their money onto the card to make their purchases.
These types of cards are a good aid for those who want to budget and prevent overspending as they do not have an overdraft facility.
The Cashplus Premier Prepaid Card is a popular choice as it only charges the user £29.99 per year with no transaction fees or monthly charges, and only 99p charge for retrieving cash from an ATM.