Credit cards ‘replacing loans’

British consumers are increasingly using credit card debt in a way that effectively removes the need for a short-term personal loan, it has been claimed.

According to a report from, there has been a trend in recent months and years toward using plastic as part of a medium-term borrowing strategy.

Millions of people are struggling to become debt free and for many the risks associated with credit card borrowing are now thought to be less daunting than those related to unsecured personal loans.

“As long as the consumer is disciplined in not adding purchases to the existing balance transfer, they will finish in front,” said Steve Willey, head of credit cards at the price comparison firm.

“But beware, this only works if you follow the golden rules of making at least the minimum monthly repayment on time and not spending on the card,” he added.

A report form the Bank of England last week showed that the scale of credit card debt in the UK increased by around £400 million over the course of February 2007.


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