Credit Card Statistics

GeoffTF

Here is an interesting article:

https://www.money.co.uk/credit-cards/credit-card-statistics

I make my day to day payments by credit card, and pay it off in full every month by Direct Debit. Interest free credit and a single bill each month. That is not what most people do. A big majority of card users pay by debit card, and a big majority of credit card users do not settle their bill each month. Why is that?

CliveOfIndia

There will be lots of reasons.  Some common ones being .....

GeoffTF said:

A big majority of card users pay by debit card

Either they don't qualify for a credit card, or they don't want one, or their debit card gives them cashback or some other perk that's more useful to them than any offerings from credit cards.

GeoffTF said:

 and a big majority of credit card users do not settle their bill each month.

Because they're either living beyond their means, or they're labouring under the misapprehension that paying interest makes them more attractive to lenders.

You're absolutely right, the "proper"  way to use a credit card is to use it regularly, take advantage of S75 and also any rewards that are on offer, and always pay in full every month.  But some people, unfortunately, rely on credit for day-to-day living expenses - which is obviously unsustainable for any length of time.

DullGreyGuy

CliveOfIndia said:

GeoffTF said:

 and a big majority of credit card users do not settle their bill each month.

Because they're either living beyond their means, or they're labouring under the misapprehension that paying interest makes them more attractive to lenders.

A little bit harsh, some will be those that have had one off incidents (lost job, boiler died, close family member died) that have pushed them into debt and they've not managed to recover from it yet but aren't getting further into debt. It's not just those that are trying to live a champagne lifestyle on lemonade income. 

SiliconChip

GeoffTF said:

A big majority of card users pay by debit card... Why is that?

Two reasons for me: one is that for small transactions with small businesses it's cheaper for them if I use a debit card, the other is that for most transactions under £100 I now pay with my Chase card for the 1% cashback. In both cases there's little benefit to me to using a credit card (although I still do use all of my credit cards at least once every 2 months to keep them active and to ensure that the DD to pay them off is still working correctly)

GeoffTF

SiliconChip said:

GeoffTF said:

A big majority of card users pay by debit card... Why is that?

Two reasons for me: one is that for small transactions with small businesses it's cheaper for them if I use a debit card, the other is that for most transactions under £100 I now pay with my Chase card for the 1% cashback. In both cases there's little benefit to me to using a credit card (although I still do use all of my credit cards at least once every 2 months to keep them active and to ensure that the DD to pay them off is still working correctly)

I doubt whether those are the reasons that motivate most card users.

My Barclaycard Rewards card pays 0.25% cashback, and gives me an average of 5 weeks interest free credit. That is money the would otherwise come from an interest bearing account. I would also have to keep money earning no interest in my current account to cover debit card payments. It would be lean pickings at best with 1% cashback, and more trouble than the credit card. The Chase 1% cashback is an introductory offer, and there are credit card deals that are better for some people.

The point has been made that some would not qualify for credit cards. I expect that there are also some who do not like borrowing, or fear that credit will lead them into bad debt. I also expect that there are some who do not know about Section 75 protection. Nonetheless, I was surprised by the survey results.

CliveOfIndia

SiliconChip said:

GeoffTF said:

A big majority of card users pay by debit card... Why is that?

small transactions with small businesses it's cheaper for them if I use a debit card

Actually that's a really good point, I'd forgotten about that one.  I do exactly the same at my local family-owned corner shop - I don't want them to have to pay the credit card fees (I know there's a fee for a debit card but it's much lower).  In fact I pay cash when I can, as they've said that's what they prefer (and no, I've no reason at all to suspect that they're fiddling the tax, it's genuinely down to their costs).

daveyjp

Not everyone has a credit limit high enough to use it for every payment over a month.

Mine is used mainly for larger purchases for s75 protection.

grumbler

GeoffTF said:

SiliconChip said:

GeoffTF said:

A big majority of card users pay by debit card... Why is that?

Two reasons for me: one is that for small transactions with small businesses it's cheaper for them if I use a debit card, the other is that for most transactions under £100 I now pay with my Chase card for the 1% cashback. In both cases there's little benefit to me to using a credit card (although I still do use all of my credit cards at least once every 2 months to keep them active and to ensure that the DD to pay them off is still working correctly)

The Chase 1% cashback is an introductory offer

No, it was extended for existing customers  too as long as their account gets £500+ credit in the previous month.

SiliconChip said:

GeoffTF said:

A big majority of card users pay by debit card... Why is that?

for most transactions under £100 I now pay with my Chase card for the 1% cashback.

What's special about £100? Is this anything that I don't know?

enthusiasticsaver

I use  a  credit card for large items but for budgeting reasons prefer to use my debit card for everyday usage as it is easier to see what we are spending on each category.  I also hate having a large credit card bill coming out of our account each month.  If it is used for one or two  large value items the money is set aside in a savings account for it usually. 

GeoffTF

grumbler said:

GeoffTF said:

SiliconChip said:

GeoffTF said:

A big majority of card users pay by debit card... Why is that?

Two reasons for me: one is that for small transactions with small businesses it's cheaper for them if I use a debit card, the other is that for most transactions under £100 I now pay with my Chase card for the 1% cashback. In both cases there's little benefit to me to using a credit card (although I still do use all of my credit cards at least once every 2 months to keep them active and to ensure that the DD to pay them off is still working correctly)

The Chase 1% cashback is an introductory offer.

No, it was extended for existing customers  too as long as their account gets £500+ credit in the previous month.

"From little treats to your next holiday abroad, get 1% cashback on your everyday debit card spending for a whole year."

https://www.chase.co.uk/gb/en/product/chase-account/

That suggests that it is an introductory offer, for new customers at least, but they could extend it again.

MorningcoffeeIV

grumbler said:

GeoffTF said:

SiliconChip said:

GeoffTF said:

A big majority of card users pay by debit card... Why is that?

Two reasons for me: one is that for small transactions with small businesses it's cheaper for them if I use a debit card, the other is that for most transactions under £100 I now pay with my Chase card for the 1% cashback. In both cases there's little benefit to me to using a credit card (although I still do use all of my credit cards at least once every 2 months to keep them active and to ensure that the DD to pay them off is still working correctly)

The Chase 1% cashback is an introductory offer

SiliconChip said:

GeoffTF said:

A big majority of card users pay by debit card... Why is that?

for most transactions under £100 I now pay with my Chase card for the 1% cashback.

What's special about £100? Is this anything that I don't know?

Yes,  it seems there is.

£100 is the minimum for s75.