Plastic Madness: Britain’s Credit Card Craze

Considering that they’ve been around for a fairly long time, it seems rather odd to describe credit and debit cards as being a national craze, but there really is no other way to describe Britain’s obsession with plastic!

Since the concept of the credit card was first described in Edward Bellamy’s utopian novel ‘Looking Backward’; a book written in 1887 and set in the year 2000, credit cards have come a long way to the point where people are more comfortable paying with plastic than with cash.

According to a recent study by personal finance website ‘Fool’, 69% of people use credit or debit cards for everyday purchases, compared to only 29% using cash. As well as not using cash to make everyday payments, the research also revealed that less people than ever were withdrawing cash. A third of people admitted to carrying less than ?10 on them at any time, and 47% of people said that they withdrew money once a week or less!

And without the hassle of having to go to the cash point, and fiddle with the change at the till, it is little wonder that Britain has seen a surge in plastic popularity. Figures from Apacs, the UK payments association, showed that between October and December 2007, ?32.4 billion was spent on credit cards and ?59 billion on debit cards. These sums reflected the highest figures on debit card records, and the second highest in credit card history.

Indeed, Britain’s passion for plastic has even acquired a certain cult status. Switching credit cards in order to utilise credit card providers’ 0% introductory offers, for example, has become somewhat fashionable, those who research the market and switch at the right times being nicknamed ‘Rate Tarts’. Okay, maybe not the most glamorous of nicknames, but if you know when to switch and onto which credit cards, you’ll wear that title with honour – and be laughing all the way to your new bank!

One thing to bear in mind if you’re considering switching your card, or even giving the Rate Tart culture a go, is to be wary of how much you are spending, and to keep clear records of how much credit you do owe, and not to get in over your head. It seems simple, but it has been reported in recent times that around 3 million Britons are juggling more than 5 credit cards! David Kuo of Fool.co.uk stated in response to Britain’s increased spending on plastic, that the figures were a reflection of Britain’s increased reliance on credit, and the ease with which one can forget how much they’re spending when suing plastic. Sean Gardner, chief executive of MoneyExpert.com supported this claim, adding that 3 million Britons juggling 5 or more credit cards suggested that they were using cards in the wrong way, and added that, although it is entirely healthy if people are switching debts from one card to another, in order to take advantage of the 0% balance transfer offers that new card users receive, owing money on a number of cards could land consumers in real trouble.
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This article has been written for information and interest purposes only. The information contained within this article is the opinion of the author only, and should not be construed as advice or used to make financial decisions. Expert financial advice should always be sought and any links contained within this article are included for information purposes only.