Store Card Use Rising As Mortgage Gets Paid On MasterCard

                                                                                         

To try and stay in the black, consumers are using cash and store cards for their purchases more and more. Department stores such as M&S and Debenhams have seen a surge in cash and store card sales. Credit card usage is definitely on the decline in stores, and it is suspected that customers are beginning to use them to pay for household expenses such as utility bills and rent payments.

A GfK NOP poll revealed that consumer confidence slipped lower than it has been since the recession of 1990, largely due to dropping house prices and increasing household expenses. Nearly two million British citizens have experienced credit card limit decreases in the past six months.

Store cards are one of the most expensive ways to borrow and increased usage demonstrates consumers were in financial trouble. You would be discouraged from spending on a store card unless you had no other options and there are distinctly different feelings between people who are cautious about spending cash and those who are financially stressed and resorting to higher cost forms of credit they already have available to them.

The interest rate for store cards can be as high as 31 percent, the average being 22 percent. This interest rate seems high when you consider the 17% rate on a credit card. According to a poll conducted last week, approximately four million people pay their rent or mortgage with a credit card, which availed up to one million pounds last year. Aside from payday and doorstep loans, using credit cards to pay loans or mortages is more costly. This is a bad sign of what is happening in household finances activities in UK.

While it may go against your better judgment and appear to place you at a disadvantage, if you are in dire risk of losing your home, it actually makes sense. The first step is to use the help of Citizens Advice, it's important to not miss aid you are readily eligible for. In you must use your card in a pinch, don't worry, it is a reasonable measure until such time as you have recovered financially. It can’t make things worse. Debt on your card is not secured by property but if you don’t pay the rent or mortgage, you could be homeless in a matter of months.

About the author:
Amy is a part-time author who writes occasional articles on financial issues, whilst working on Vanquis Credit Card - Visa for people with adverse credit histories.

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