This 2015 the majority of us don’t plan to use credit.
No, we don’t have a crystal ball that predicts the future nor are we psychic but data from Callcredit information Group (partnered with YouGov) reveals how you plan to use credit and borrow in the year ahead. The results proved interesting with over a third of those surveyed saying they plan to use credit only to take advantage of rewards and cashback whilst young adults are most likely to utilise it for overspending.
Forty nine percent of people confirmed that they had no plans to use credit this year. Of those who are planning on taking out credit in 2015 though, 42 per cent plan to use credit cards, followed by overdrafts (16 per cent). At the other end of the scale, 5 per cent of UK adults plan to use a personal loan while only 1 per cent would take out a payday or short term loan
Interestingly, there’s quite a difference in how consumers of different age ranges plan to use credit. Out of all the age groups surveyed, young adults aged 18-24s were most likely to use credit for day-to-day overspending and stated it would be their main reason for using credit. 20 per cent of 25-59 year olds confirmed they are taking control of their finances and planning to use credit for debt consolidation. This shows that even though consumers are taking a different approach to lending some are still turning to credit to help top up their finances.
The over 60s seem to be more money savvy being the most likely to take advantage of credit card loyalty schemes or bonuses. This age group also considers potential rewards and cashback as being the most important factors when taking out a new credit card.
And the type of reward the people of the UK would most like to get? Cashback tops the poll with 39 per cent of all people surveyed saying this is the reward they would most like from their credit card. This could be because with cashback you are not limited to what you can redeem your reward on and you can spend the cash whichever way you choose. While Cashback tops the rewards poll for both men and women, the next best reward for women is 0% purchase offers whereas men are more likely to be influenced by an attractive low APR credit card.
And how did the results fair regionally?
- Londoners and the rest of the South best manage their credit cards by paying off their debts in full every month compared to the rest of the UK
- Scotland are least attracted to credit cards made for building credit rating whilst the Wales and the Midlands are most likely to take out a
- Credit for overspending is used largely by those living in London – could this be due to the higher cost of living in the Capital?
- The further up the country you go the more people will be borrowing money to pay for big occasions – 26% of Scotland and the North plan to use credit for weddings and holidays compared to 24% in the Midlands and Wales and just 19% in London.
Will Lowe, Managing Director, Marketing Solutions at Callcredit commented: “Consumer spending has fluctuated over the years, which has been mainly down to the economic climate influencing consumer’s attitude to credit.’ The results of the research clearly highlight consumers on a whole are managing their credit more carefully and plan to carry on doing so in 2015.
*All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 1,550 adults. Fieldwork was undertaken between 29th – 30th January 2015. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).