Credit card repayments fall whilst withdrawals increase
Most people find that having a credit card offers freedom, flexibility and convenience, but over recent years more and more people have become reliant on their credit cards in an increasingly difficult financial climate. In fact, more recently people have been trying desperately to pay off their credit card debts, which have become a huge burden around the necks of many households and individuals.
However, things have become increasingly difficult for households of late, with soaring living costs and bills combined with frozen wages really taking their toll on household finances. Whilst many cardholders have the best of intentions when it comes to repayment their credit card debt, and have been trying to pay down this debt as much as possible, the difficult financial situation has made it impossible for many to keep this up.
According to the FICO Benchmark Reporting Service cardholders in the UK are now paying off less of their credit card debt than at any other time during the past two years, with many unable to afford to pay much more than the minimum repayment on their cards. This has been seen particularly with holders of classic credit card accounts that have been opened within the past five years. The data has also shown that the number of credit card users who are using their cards to make cash withdrawals has increased, as people continue to battle to make ends meet financially.
One official from FICO said: “The combination of flat spending on classic cards with lower payment percentages and higher cash usage indicates increasing strain on consumers’ wallets. While one month is not enough to call a trend, we are monitoring these and other patterns closely to help our clients manage their card portfolios and understand changes in the UK consumer’s financial health.”
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