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Research: More people reliant on credit cards for day-to-day spending

More than a third of all Britons did not have a sufficient current account balance to meet their living costs in the first month of 2011, if new figures regarding credit card usage throughout January ...

More than a third of all Britons did not have a sufficient current account balance to meet their living costs in the first month of 2011, if new figures regarding credit card usage throughout January are anything to go by.

In news which may be of note to those with Post Office credit cards, the financier yesterday (January 31st 2011) revealed that more than a third - 34 per cent - of all Britons were reliant on credit to fund their day-to-day expenditure last month.

This equates to a total of more than 11.5 million people, while the study also established that in excess of 2.4 million members of the population are planning to spend more on their plastic over 2011, with17 per cent indicating that this increase will be by up to 200 extra every month.

In related news, Mark Bower, managing director of Money Maxim, stated recently that monetary pressure on UK households will not decrease in the new year.

Meanwhile, students have been offered advice on credit.

Students considering the possibility of taking the time to compare savings on personal finance options such as credit cards due to the low amount of cash in their current account may wish to take note of some expert advice.

This is because yesterday (January 25th 2011), the National Union of Students and charity Credit Action teamed up to produce the Credit Crunching -a student guide to credit handbook, which is aimed at providing impartial advice to scholars on how they can spend money wisely while at university.

It is estimated that the average student now graduates with around 23,000 worth of debt attached to them, meaning that being well-informed about personal finance options could be essential to help people make sound monetary decisions.

Joanna Parsley, associate director of Credit Action, commented: "With the future of student finance in the spotlight it is essential for students and graduates to both understand credit and use it wisely."

Meanwhile, having sufficient home insurance cover may also be vital for students due to the fact that areas where scholars live are often targeted by thieves.

Interest rate tends to be lower on credit cards than store cards, it has been stated.

When weighing up the advantages of both credit cards and store cards pound for pound, the former would usually be chosen ahead of the latter.

This is according to Mark Bouris, executive chairman of wealth management and advice firm Yellow Brick Road, who stated one of the reasons for this is because the interest rate tends to be lower, reports.

He also stated these Aussie credit products are usually linked to a person's internet banking, plus frequent flyer reward points can be collected on them.

But he advised: "Do plenty of research before signing up for any card because there are good and bad examples of each type."

"Credit cards tend to have slightly lower interest rates but they are still usually more than 15 per cent."

What's more, Justine Davies, a finance author with a decade of financial planning experience, pointed out such products with a low interest rate are what most shoppers would opt for, plus she recommended people should be getting a card with the lowest interest level if they do not pay their debt back each month.

And Ms Davies noted this can vary from ten to 23 per cent, which could be a huge difference to some.

In addition to this, when comparing store cards with credit cards, Kerrin Falconer, a financial planner, stated the former tend to have a higher level of interest, plus there are annual fees and transaction fees at times.

But she encouraged those looking to take out a product to figure out what they require a new card for, stating: "Like private health cover, needs are different and what works for one may not necessarily be the best choice for another."

This comes after Noel Whittaker, director of Whittaker MacNaught, advised people with debt on their credit card to move it to another product with a low interestHealth Fitness Articles, the Sydney Morning Herald reports.

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