With the holiday season fast approaching, HSBC UK is urging residents of North East England to adopt prudent spending habits, particularly during the festive shopping period. Recent research from HSBC UK sheds light on the credit card habits of Brits, revealing that over half of the population (52%) use credit cards for routine purchases like groceries and fuel on a weekly basis.
The findings highlight that credit cards have become an integral part of financial management for many, with 63% of Brits owning at least one credit card. Despite this widespread usage, HSBC UK’s data demonstrates responsible credit card habits, as consumers typically utilise only 20% of their credit limit, averaging just over £50 per transaction.
Madhu Kejriwal, Head of Unsecured Lending at HSBC UK, emphasises the importance of responsible credit card usage, stating, “Credit cards can help you plan and manage your finances, offering a way to make large or unexpected purchases safely and at a time to suit you. However, spending within your means is key.”
The research reveals that younger adults under the age of 24 are drawn to credit cards for rewards, while those over 35 prioritise payment protection. Furthermore, 45% of credit card holders pay their balance in full each month, showcasing a responsible approach to credit management.
Despite these positive trends, HSBC UK acknowledges that the holiday season often sees an increase in credit card usage. To help North East England residents navigate the festivities without falling into financial stress, HSBC UK suggests various strategies, including credit card instalment plans and balance transfers to 0% card offers.
For those with existing debt, credit card instalment plans provide a structured way to make regular payments over a specified period. Additionally, balance transfers to 0% card offers can offer relief by providing an interest-free period, allowing individuals to manage their debt more effectively.
To illustrate the potential savings, transferring a £2,000 debt to HSBC UK’s 0% over 27 months credit card offer could result in a £1,015 saving after the £59 fee. Similarly, a £5,000 debt on the same offer could save the customer £2,539 in interest after the £149 fee.
To empower North East England residents in managing their credit cards wisely, HSBC UK offers eight quick tips:
- Choose the right credit card for your goals.
- Use the interest-free period wisely for balance transfers/purchases.
- Pay more than the minimum to reduce interest.
- Automate credit card repayments through Direct Debit.
- Adjust your credit card limit based on affordability.
- Use credit cards for purchases over £100 for Section 75 protection.
- Look for credit cards with rewards such as cashback or air miles.
- Maximise balance transfers for breathing space to pay off bills.