The general consensus among personal finance experts is that using credit cards to pay for everyday essentials such as utility bills or groceries regularly is a surefire sign of a household living beyond its means.
Yet, in a study by a price comparison website, 14% of the Britons surveyed have admitted to using their credit cards to pay for household bills such as gas and electricity on a regular basis, while 43% said they used it to regularly to pay for groceries, and a further 38% said that they used it to pay for fuel.
Predictably, more than half of those surveyed also said they used their cards to fund the purchase of “big ticket” luxury products, such as big screen plasma TVs or Blu-ray players.
With the increasing availability of cashback and reward offers on credit cards in the market, it is perhaps no wonder more and more consumers are taking an interest in raking up reward points on their cards by using them as much as possible.
However, with the typical transactions costing £3, and interests rates which often go over 20%, taking up such offers are only advisable if consumers are able to repay the credited amount within the one month period, during which no interest charges are levied.
According to Kevin Mountford, head of banking at moneysupermarket.com, responsibly used, credit cards can be an invaluable asset, but irresponsible usage, such as using it to pay for essential items and not repaying the full amount within the month, is asking for some financial trouble.
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