An increasing number of people seem to be opting for paying off debts rather than putting their money into savings accounts, an industry expert has noted.
Michelle Slade of price comparison site Moneyfacts.co.uk observed that the savings rates, which “are at an all-time low”, could be contributing to people’s decisions to reduce their debts, which “makes more financial sense”.
She further suggested that the risk of unemployment could be a factor in the decreased use of credit cards, with people operating on the premise that “if they haven’t got it, they don’t spend it”.
Her comments follow statistics from the UK Payments Administration, which showed a fall in credit card spending in relation to both numbers of purchases and the amount spent, which dropped by 0.1 per cent and one per cent respectively.
Ms Slade remarked that these newfound attitudes to debt could be a result of the recession and that people have learnt not to slide too much into arrears.
By Sarah Adie