Consumers more interested in credit card limits than rates
March 1, 2011
According to one recent report many consumers in the UK who are looking for a credit card are more interested in the credit limit that they will get on the card rather than on the rate of interest that they will pay on their borrowing. Experts have said that people should use credit cards very carefully in the ongoing difficult financial climate. It is recommended that consumers use credit cards to help with cash flow and then repay the balance as quickly as possible to avoid spiralling debt and interest charges.
However, worryingly there are many people that are more concerned about how much they can get on a credit card rather than how much interest they will pay on their borrowing. Many of these people are also using the credit on their cards to splurge out and buy luxuries that they do not need just because they have the means to do so because of their credit card limit.
There are concerns that with the rising level of personal debt in the UK this sort of mentality could lead to increasing debt levels amongst consumers who could actually avoid large levels of debt by not spending unnecessarily on high interest credit cards. Those looking for a credit card should focus on only borrowing what they need to and getting the best rate possible on their borrowing.
An official has also warned on the use of price comparison sites to get the best deal on a credit card, warning that whilst these sites could sometimes be effective many focused on trying to get consumers to take out cards with providers that paid them the highest levels of commission, which could lead to more expensive borrowing for consumers.
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