Motorists turn to credit cards to fill their tanks



Equifax

Equifax

Customers are now finding the cost of petrol and diesel to be so much they are having to use credit cards to pay for it.

Research from Equifax, an online credit-information provider, has revealed that nearly half of all transactions at the pump are now made up of credit card purchases.

With customers not all paying off their balances in full each month, Equifax is worried that more and more customers are going to end up plunging themselves into more and more debt.

External Affairs Director from the firm, Neil Munroe said, “It’s not surprising that motorists opt to use their credit card when filling up.

“Not many people will be carrying around at least £50 in cash but what is worrying is that, for over 10% of people, they are only paying off the minimum on their credit card each month. A further 18% are paying off less than 25% of their balance.

“What this means is they’re paying a lot more for their fuel than just £1.30-plus per litre; and more for diesel.

“Indeed, with one in five saying they believe it will take them more than a year to pay off their credit-card debt in full, the interest accrued will be quite considerable.”

The companies research also showed that nearly a quarter of all credit card users had an outstanding balance of between £1000 and £5000, a considerable lump, and one that leave large interest payments taking a considerable bite into each users monthly budget.

Munroe also talked about the economy’s effect, adding, “With inflation hitting 4.4% last month, it’s not surprising that many families need to resort to using their credit cards for more and more living expenses. But we believe this does highlight just how important it is to keep on top of credit commitments overall, especially with the growing threat of a Bank of England interest rate rise in the coming months.

“However, we recommend people should not use credit cards for long-term financing due to the high interest rates that can be incurred, and if a person does decide to take out a credit card with an interest-free period, they should make sure the debt taken on during that period is manageable, as it can easily spiral out of control.

“This is especially true if it has a balance-transfer offer too, as the rate of interest could be higher after the free term than the previous credit card.”

Leave your comment

  • (not published)