UK Finance household lending data just released – showing an 8.1% jump in credit card spending year-on-year, Contributor Peter Briffett, Co-founder and CEO – Wagestream.
The idea that people prefer to spend money they don’t have is absolutely ludicrous. That’s never been our culture in the UK. What these figures really point to is a growing dependency on expensive, unsecured credit.
Simply because repayments grow in line with credit card spending does not necessarily mean it is a preferred payment method.
More likely, those caught in the payday poverty cycle, in which a monthly windfall doesn’t fit with the volume and frequency of outgoings that modern life imposes on us, forces people into short-term borrowing. They are using credit cards to make ends meet in a doom loop of credit dependency.
This is not a trend to be celebrated as a conscious change in spending culture but a big red flag that millions of people find themselves under severe financial pressure. The real winners from that payday poverty trap are the credit card companies and payday lenders. Credit cards are not and should never be a lifestyle choice.
