MANY of us start the year still trying to shake off our Christmas spending hangover, but despite the gloom, it is also the perfect time to start afresh and set goals for the future.
At the dawn of the new year, and new decade, we took a deep dive into Sun readers’ credit card health to find out where you might be going wrong and how we can help get your finances into better shape.
Over the coming months we will be offering expert insight to show you how to overhaul your credit card finances in 2020.
First though, we share ten things we have learnt from putting your money habits under the microscope in our readers’ survey.
Everyday bills are a bigger source of worry than long-term financial plans
A whopping 72 per cent of Sun readers are concerned about keeping on top of their household bills, while 69 per cent fret over covering the cost of Christmas, and the same percentage worry about planning for retirement. Paying for a holiday, keeping down a job and credit card debt were all concerns for more than 50 per cent of those polled.
Nearly 33 per cent of readers with credit cards are concerned about their debt
More than 50 per cent of Sun readers have a credit card and 63 per cent of these say they are concerned about the debt they have built up.
The higher your income, the more likely you are to have a credit card
We usually think of credit cards as something you turn to when you can’t afford to pay in cash, but our research suggests it is those with the highest earnings who use them most. Sixty-six per cent of Sun readers who earn £40,000 or more have a credit card, compared to just over fifty per cent of those who earn £20,000 to £39,999. Only 40 per cent of those who earn less than £20,000 have a credit card.
High earners often have multiple credit cards
Sixty per cent of high earners who use a credit card have more than one, our research found. This suggests that they could be juggling several cards in order to take advantage of the perks that different brands offer, which include cashback, zero per cent interest on purchases or balance transfers, air miles or fee-free spending abroad.
Many people don’t trust themselves with credit
For those who don’t have a credit card, fear of debt was the main reason given. Others simply didn’t like the idea of using one, didn’t feel they needed one or were worried they would be tempted to overspend.
Thirty per cent of people leave their credit card at home
Out of sight is out of mind, so many find the best way to avoid the temptation to overspend is to keep their card tucked away in a drawer or another safe place.
But 49 per cent of those with credit cards use them at least once a week
Whether it is to spread the cost of spending or to take advantage of other benefits, 49 per cent of readers who have credit cards use them on a daily or weekly basis.
Men are more confident in their understanding of credit cards, but women know more
Our research found that 69 per cent of men feel they have a good knowledge of credit cards, compared to 56 per cent of women. However, women performed better when their knowledge was actually tested as 48 per cent answered five or more questions correctly compared to 41 per cent of men.
Make 2020 the year your credit card starts working for you
Small changes could make a BIG difference…
- Be alert: Credit card providers offer a range of free alerts like reminders when your statement is ready, payment is due and when you’ve reached your monthly spend limit, to make managing your money easy. Setting them up is simple too – you can either call your credit card provider or check your online account.
- Get direct: Help avoid unwanted missed payment fees, even if the deadline slips your mind, by setting up a direct debit for your credit card. With Barclaycard and most credit card providers, you can set your direct debit to pay the full, fixed or minimum amount due and most credit card providers will send you a reminder before the payment is taken to help you stay in control. Plus, you can pay more on top of this and flex the amount each month as you choose to pay off your balance quicker.
- Merge: Combine multiple credit card debts into one card that offers a 0% balance transfer to avoid paying the interest on your balance. This can give you the breathing space to pay what you actually owe, rather than just the interest. Bear in mind you’ll often be charged a fee on the amount you’re transferring which will be added to your balance.
Click here to find out more about managing your credit card with Barclaycard.
Fifty per cent of people wrongly believe that not using a credit card improves your credit score
In fact, you need to prove that you can use credit responsibly to get a high score. Spending on a card and then paying it off every month can help with this.
Thirty per cent of people pay off their full credit card balance every month
But 16 per cent of credit card users only make the minimum repayment, which means it could take them years longer to clear their debts and cost much more in interest.