Credit card spending to fall

More and more people are planning to cut down on their credit card spending, according to a new report.

08:15 21 January 2005

More and more people are planning to cut down on their credit card spending, according to a new report.

The amount of money splashed on plastic is set to fall to its lowest level in four years according to figures from the Morgan Stanley Card Index.

Britons expect to spend only 730 on credit cards over the next three months, down 30 per cent from the 1,036 they said they would spend in the fourth quarter of 2004.

People from Yorkshire and Humberside are expected to be the most controlled, planning to spend just 334 between now and March.

Last week Nationwide revealed that the number of Britons planning to reduce their debts has more than tripled over the last six months.

In June just 16 per cent of the population planned to cut their outstanding household borrowing, but Nationwide's latest consumer confidence survey has found 49 per cent now mean to reduce the amount they owe.

Observers have pointed out that moving expensive credit and store card debt to a personal loan or transferring balances to a card with a zero per cent introductory offer are effective ways of reducing debt payments aiding loan reduction.

Intelligence Finance has found transferring credit card debts to a card with a zero per cent introductory offer could save consumers 585 million a year.

While Sainsbury's Bank has revealed that consolidation loans are becoming a more popular choice amongst people who are trying to manage their debt, with data showing that 5.4 billion of new consolidation loans will be taken out in the next three months.