- Nearly three in 10 (29%) of Brits are using credit cards to feed their families
- A quarter (25%) of UK adults – 13 million Brits – are using credit cards to pay for everyday essentials such as travelling to work
- A fifth (20%) of the nation is using borrowed money to pay their household bills – rising to almost one in three (32%) in Belfast
- Those aged 55 and older typically got their first credit card aged 32, but for those under 35, it is nine years earlier – age 23
- Almost two-fifths (39%) of Brits cannot correctly define ‘credit score’.
With food prices rising at their fastest rate in 45 years1, new research from Forbes Advisor
reveals almost three in 10 (29%) Brits are using credit cards to buy groceries and essential food items.
One in four (25%) consumers – the equivalent of 13 million Brits2 – are relying on credit to fund everyday costs such as transport.
With some household’s income no longer sufficient to cover monthly outgoings, one fifth (20%) of the nation are also using borrowed money to keep the lights on and pay their energy and other
Main reasons for Brits using credit cards
|Rank||Credit card purchase||% of people who use their credit card to purchase|
|1||Emergencies or unexpected costs||38%|
|4||Everyday items (e.g. lunch, drinks, transport)||25%|
|5||Luxuries (e.g. news clothes, night out)||23%|
Reliance on credit varied across UK regions. For example, over a third (36%) of residents in Southampton are using credit cards to pay for essential expenses, like transport costs. While almost one in three (32%) in Belfast are relying on plastic to pay for household bills, such as gas and electricity.
As reliance on credit cards grows, data shows consumers are beginning to use them at a younger age. The average person over 55 signed up to their first credit card at the age of 32. This compares to age 23 for the average 18-34-year-old – a whopping nine years difference.
Despite the marked upward trend in credit card usage, many are still unaware of how this kind of credit works. One area causing trouble for Brits includes being able to correctly define a ‘credit score’ – something almost two-fifths (39%) of the population are unable to do.
The nationwide gap in knowledge is further evidenced by the 38% of Brits that cannot correctly identify where to find their credit score rating. This is particularly apparent among young people, as a whopping three in five (60%) 18-34-year-olds don’t know where to access this information. As many as 4% of Brits also think Wikipedia will tell them their credit score.
Despite knowledge gaps being expressed across a range of credit-related areas, almost two fifths (37%) of Brits would never seek help to understand credit cards and the application process.. Older respondents are most likely to ‘go it alone’, with more than half of over 55s rejecting the help of others (56%) compared to just 10% of 18-34-year-olds.
Scots are most likely to accept help if it improves their knowledge of credit, while those in the North East of England are almost twice as likely to reject guidance on the topic.
UK regions most likely to reject financial guidance
|Rank||Region||% who would not seek help|
|2||East of England||47%|
|4||Yorkshire and Humberside||41%|
Those who are open to assistance are most likely to reach out to their bank (20%), but parents (10%) or price comparison websites (11%) are more likely to be sought out for guidance than a financial advisor or professional (8%).
Laura Howard, financial expert at Forbes Advisor, says:
“Credit cards are a great servant but a terrible master. That’s why it’s extremely concerning that nearly a third of people are now relying on them just to buy their groceries, while a quarter are leaning on them to fund everyday costs such as travel.
“It stands to reason that, where credit cards are necessary to meet this kind of essential spending, many households will be unable to clear their monthly balance. And with the effective credit card interest rate now at 19.55% according to the latest Bank of England data, this only exasperates
affordability problems for households.
“If you are late with a payment, or miss one completely, this will also have a negative impact on your credit score – but, worryingly, our data also shows that 39% of Brits could not define what a credit score is and 38% don’t know where to find it.
“While living costs are rising at their fastest rate in 40 years, it’s really worth exhausting all other options before running up a balance on an interest-bearing credit card that you have no means of paying off. This should include contacting your energy supplier, mortgage lender or any other creditor you are unable to pay and asking if you can come to a payment arrangement.
“If you feel as though you are in a spiral of debt you cannot get out of, draw a line under it today by contacting a registered debt charity such as Stepchange.”