Credit card holders snapping up music and DVDs
It has been revealed following a recent study that millions of adults in the UK are using their credit cards online, and the most popular items purchased on credit cards online are DVDs and music. Everyday many people get online to purchase a variety of goods and services with their credit cards, and at this time of year, in the run up to Christmas, many credit cards are given a good airing as people flock online to do some serious spending.
It is thought that over 25 million people are using their credit cards regularly online in the UK, and on average the monthly amount being spent per person online is £192 a month. This amounts to a total monthly spend of around £6.4 billion a month. After music and DVDs the most popular items purchased on the Internet with credit cards were books, holidays, and fashion purchases.
The research was carried out by Sainsbury’s Finance, and an official from the company said that the growth in online spending had rocketed to staggering levels, with consumers having more confidence than ever when it came to credit card spending online.
However, with more and more people using the Internet to conduct transactions and make purchases officials from Sainsbury’s said that it had become increasingly important to ensure that computers were protected using adequate security software to avoid them being hacked and account details being obtained by fraudsters. It is also important for consumers to always buy through secure websites, and avoid linking to them via emails.
Head of credit cards at Sainsbury’s Finance, Stuart McKeggie, said: “The growth of online shopping in such a short time is staggering. Our research found that only seven per cent of credit card holders do not use their cards online.”
Making your credit card payments
Using a credit card offers consumers great convenience, ease, and flexibility, but unfortunately the money that you spend on your credit card does, at some point, have to be repaid. Some people repay their credit card balance in full each month, and this is a great way to use and repay your card, as it means that you get to enjoy the convenience and ease of a credit card without having to pay interest on your credit card balance.
Of course, not everyone can repay their credit card in full each month, and those that are unable to do this need to work out exactly how and when they will repay the balance on the card. If you do not clear your card in full each month it is important to keep a close eye on your statements, especially if you use the card fairly regularly, as otherwise you could end up going over your limit and being charged.
The first thing to remember when it comes to making credit card repayments is that you should always try and make more than the minimum repayment whenever possible. If you only make minimum repayments on a regular basis you repayment will be mostly swallowed up in interest, which means that your principal debt will barely be touched. This means that you will be paying off the debt for years to come, and you will end up paying a fortune in interest.
Another thing to bear in mind is that it can be all too easy to pay less than the minimum amount inadvertently, and worse still it can be very easy to miss your repayment altogether or make it late, which means that you will incur a charge that will simply add to your debt.
A good way to avoid this from happening is to ensure that you set up a direct debit with your bank, so that the payment goes out automatically each month. This will eliminate the chances of you missing a repayment or making a late payment, will ensure that you always pay at least the minimum repayment, and saves you the hassle of having to make calls, go online, or send a payment through the post every month.
It is important to make regular and correct payments on your credit card each month, as otherwise your credit rating and history could be affected as well as you being charged fees by the provider.
Credit cards set to receive a bashing with online shopping
A recent report has shown how internet shopping has taken off over recent years, with a rising number of consumers now heading to their computer desks rather than to the High Street in order to buy a variety of goods and services. Figures were recently released by the Office for National Statistics, showing how there had been a sharp increase in online sales transactions, as more and more people become increasingly confident about shopping online.
Between 2008 and 2009 there was a 25 percent increase in online transactions according to the figures, and with a rising number of people hoping to get bargains online this could show a further increase. With Christmas around the corner many people will now be gearing up to get their Christmas gifts and make a variety of purchases, and this will be paid for using their credit and debit cards.
In the current financial climate most people are looking to bag a bargain or ten this year, and many believe that the Internet is the best place to go for both choice and great value. This indicates that many of us will do away with the usual ritual of heading out in the freezing cold, queuing for hours, and going from shop to shop in order to find the gifts that we want. Instead, savvy shoppers are likely to sit back with their laptop and a nice cuppa, get their credit card ready, and purchase their gifts from the comfort and warmth from their own home.
One consumer said: “I’ve been doing my Christmas shopping online for the past few years now, because it is easier, it’s cheaper, it saves me a huge amount of time and hassle, and there is more choice than you could imagine online.”
Choosing the right rewards on your credit card
The great choice of credit cards available on the market these days means that there are cards available to suit most needs and circumstances, and in particular those with decent credit are able to enjoy a very good choice of cards offering a range of benefits. Amongst the credit cards available you will find rewards based credit cards, and these will enable you to enjoy earning one of a variety of rewards based on your needs and preferences.
These credit cards can come in really useful at this time of the year, with Christmas just around the corner, and even if you have money put aside for your Christmas shopping it is worth considering using one of these rewards based credit cards and then paying the money you have put aside onto the card so that your debt is repaid and you are not charged any interest on it. This was you have the convenience and ease of using a card for your shopping (which comes with additional protection under the Consumer Credit Act), you can avoid having to pay any interest, and you can benefit from earning rewards for using the card.
It is important to make sure that you look into all of the rewards options available so that you can choose a rewards card that matches your needs. There is no point getting a rewards card that offers rewards that you won’t really use. For example, if you don’t tend to travel abroad very often then getting a card that offers air miles won’t really be of any benefit. However, if you are a keen shopper then you may want to consider a card that offers discounts and vouchers.
Another credit card that will probably suit most people is a cash back credit card, and these enable you to earn a little something back for every pound that you spend on the card. Whilst the amount earned per pound spent is only fractional if you use the card regularly or make larger purchases on it the money soon builds up. There are many rewards based cards to choose from, such as cards that offer discounts, cash back, air miles, rewards points that can be saved towards days out, and more.
If you are considering a rewards based credit card then you should remember that in order to make the most of the card you should ensure that you repay the balance in full each month. If you spread the repayments you will be charged interest, and this will outweigh any rewards that you earn on the card.
Warning over charity based credit cards
There are many different types of credit card on the market these days, with cards such as interest free purchase credit cards, balance transfer cards, rewards based credit cards offering everything from cash back to air miles, and charity credit cards. Over recent years charity credit cards have become more popular amongst those keen to donate to charity, but one group has issued a warning about these cards.
With charity credit cards a small donation is made to the specified charity every time a pound is spent on purchases using the credit card. The amount donated is only a small fraction of the amount spent, but for many people – especially those that use credit cards regularly, this is an effective way to give to charity without the need to actually budget for donations and send payments.
However, officials from a price comparison website, Confused.com, have said that these credit cards may not be as effective and charitable as consumers might think. The statements comes after the website reviewed and surveyed a number of the leading charity based credit cards in the UK, and found that the donations that came from these cards were not as great as the cash back that could be received on cash back credit cards.
Chris Griffiths from Confused.com said: “While [charity credit cards] undoubtedly have honourable intentions, customers may in fact be able to make a bigger contribution by using a traditional cash-back card and donating their rewards to the chosen charity themselves. Given that so many providers have corporate social responsibility programmes and extol their own ‘green’ virtues it would be nice to see them apply the same standards to their charity cards as they do to their best reward cards. Until then it may be better for canny customers to opt for a cash-back card and make their own donation.”