Paying off credit card debt

Equifax, is providing an insight into the current state of consumer credit card debt.

“We conducted research earlier this year amongst customers of our credit report services”, said Neil Munroe, External Affairs Director, Equifax. “Of the 2,380 respondents to the survey, 91% said they use credit cards with 30% of those having two and over 20% having three.

“What was particularly interesting was that nearly a quarter (24.6%) had a current outstanding balance of between £1,000 and £5,000 and nearly 30% said they pay off less than 25% of the balance or the minimum payment each month. And when we asked how long they envisaged it would take them to clear their credit card debt, over 1 in 5 said more than a year.

“With nearly two thirds (63.1%) saying they use their credit cards for everyday living expenses, this does seem to suggest that credit card debt plays a fundamental role in day to day family finances.”

The Equifax research looked at credit card usage around the UK. Whilst the regional variances aren’t particularly great they do illustrate the considerable dependency on some form of credit for many UK households.

Regionally consumers in Wales rely the most on their credit cards for fuel payments at 68.2%. Perhaps not surprisingly, Londoners use their credit cards the least across the UK for fuel payments – at 43.4% - probably because they are less reliant on their cars in the City. However, it is Southerners (Londoners and those in the South East) who make the most use of their credit cards for everyday living expenses at 67% and 69% respectively.

“With inflation continuing to rise, it’s not surprising that many families need to resort to using their credit cards for more and more living expenses”, continued Neil Munroe. “But we believe this does highlight just how important it is to keep on top of credit commitments overall.

“However, we recommend people should not use credit cards for long term financing due to the high interest rates that can be incurred. And if a person does decide to take out a credit card with an interest free period, they should make sure the debt taken on during that period is manageable, as it can easily spiral out of control. This is especially true if it has a balance transfer offer too, as the rate of interest could be higher after the free term than the previous credit card,” concludes Munroe.

To easily access your Equifax Credit Report visit www.equifax.co.uk where it is designed to help individuals understand their credit file. It also includes expert tips and advice to help consumers take the right steps to manage their finances and navigate through life’s challenges. If the customer does not cancel before the end of the 30 Day Free Trial, the service will continue at £6.99 per month, giving them unlimited online access to their credit information and weekly alerts on any changes to their credit file. It also includes an online dispute facility to help them correct any errors on their credit file simply and quickly.