News

    Tuesday, 22 August 2017 15:27

    Credit card use reaching dizzy heights - and contactless is helping fuel this

    We’ve been reporting for the majority of this year that the numbers of people splurging on credit cards has risen at an alarming rate, and whilst we do believe that the country has a problem with money management and spending money that they haven’t got, it appears that the contactless payment phenomenon has a part to play in the figures.

    Credit cards easily make up about 56 per cent of all payments on retail items, and cards that have the contactless option for use of purchases of under £30 is now a big player in this, amounting to nearly 30 per cent of all transactions on cards. Credit card spending on the whole hasn’t been as massive since 2009.

    It is easy to see why the contactless option is so popular. Anything that you buy that is under £30 can be purchased with so much ease - it works simply by tapping a credit card onto a machine. The same applies with modern payment techniques built into our smart phones, one tap on the payment machine with the phone and you can be away with goods in a second. It’s easy and convenient for all concerned.

    We must stress, however, that while everyone seems to love the contactless option because of its ease of use, it is, when all is said and done, still credit. It is all too easy to tap the card on several machines and not think of the repercussions that will come later.

    Regardless of how you use the credit card, it will still need paying off, so people must ensure that they have the means to pay for the amount that they have spent.

    We do worry that making spending on credit cards as easy as the contactless option is, is even more of an incentive for people to overspend, so we always urge people to be cautious.

    Security of contactless cards also needs talking about. Of course, because it is literally a ‘tap and go’ system, there is no pin number required so anyone could use the card to purchase something below £30. People must ensure that they are security conscious with their cards and money at all times. 

    Consumer spending, according to many forecasts, is at an all-time high and it isn’t hard to see why. Credit cards are easy to get hold of and spend on like there is no tomorrow, and personal loans and the interest rates that accompany these are the lowest that they have been in a long time. Unsecured consumer lending is at the highest since 2009, which was the year following the credit crash – we hope we don’t end up going down the same path again.

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    Warning: Late repayment can cause you serious money problems. For help, go to the MoneyAdviceService.org.uk 

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