- More than half of people use their credit cards for regular purchases, like groceries or fuel, at least once a week (52%)
- Consumers use on average 20% of their given limit and nearly half (45%) pay their balance off in full each month
- Younger adults (under 24) say the main reason they use a credit card is rewards, while the over 35s value payment protection
HSBC UK urges customers to shop savvy this Christmas, as research reveals half of Brits use credit cards for weekly shop
With 63% of Brits owning at least one credit card, research from HSBC UK reveals that many consumers have developed healthy habits to use a credit card to their advantage.1
HSBC UK’s usage data shows customers use on average just one fifth of their available credit limit (20%), spending on average just over £50 per transaction and spending an average of £656 on their credit card.2
The number of customers using credit cards is 2% lower this year than in 2019, before the pandemic. However, customers spend an average of 20% more on their cards than four years ago, amid the rising cost of living.3
But, with research showing that more than half of people pay for items such as groceries and fuel on credit cards at least once a week, HSBC UK is urging shoppers to be savvy with their spending this Christmas, to help avoid the January Blues.
Madhu Kejriwal, Head of Unsecured Lending at HSBC UK said: “Credit cards can help you plan and manage your finances, offering a way to make large or unexpected purchases safely and at a time to suit you.
However, spending within your means is key. If you’re using a credit card to pay for something that you don’t have a way to pay back, then it’s not the right option for you. If you’re struggling to manage your finances, speak to your bank as soon as you can – we’re here to help.”
The research, which looked at attitudes towards credit cards and their use, showed a responsible approach to credit card usage, with just under half (45%) of credit card holderspaying off their balance in full every month, and three in five saying they’ve never missed a payment (61%) – highlighting the resilience of consumers in the UK despite the current economic environment.
Other common reasons for using credit cards were found to be for purchase protection, convenience, financial emergencies, rewards/cashback and unexpected larger spends.
And those reasons varied with age: rewards are top for under-24-year-olds; 25-34-year-olds value improving their credit score, while over-35s were most likely to value protection on purchases.
According to the research, the average debt across credit cards in the UK is £3,311 with the average credit card limit at £6,312. But more than one in four (27%) owe £2,000 or less, with around the same number (28%) having no debt at all.
While these findings are optimistic about credit card spending and debt management, there are still many consumers resorting to credit card use to manage their finances and pay off debts, particularly during holidays and at more expensive times of the year such as Christmas.
Credit card installment plans can support customers to make regular payments over a specific time period. Instalment plans are a simple way of spreading the cost of larger purchases, by repaying in regular instalments over a chosen period.
Balance transfers to 0% card offers are another popular way of managing debt as it is interest free during the offer period. It works by moving your debt from one or more credit card to another credit card with a 0% offer.
For example, moving £2,000 debt on to HSBC UK’s current 0% over 27 months credit card offer, would result in a saving on interest of £1,015 (after the £59 fee). While a debt of £5,000 on the same 27 month 0% offer, would allow the customer to save £2,539 in interest (after the £149 fee).
Top tips for managing your credit card
There are various ways you can use a credit card responsibly, here are eight quick credit card tips:
| Choose the right credit card for you | Your choice of credit card will depend on your goals. Do you want to make a big purchase, earn points for spending or consolidate your credit card balances? |
| Use the interest-free period wisely | 0% interest periods on balance transfers/purchases can give you more time to clear your balance before being charged interest. |
| Pay more than the minimum | If you cant pay your balance in full, then pay more than the minimum in order to reduce the amount of interest you’ll pay. |
| Automate your credit card repayments | The easiest way to make sure your credit card repayments are always made on time is to set up a Direct Debit. |
| Have the right credit card limit | Ask your lender to increase or decrease your credit card limit according to affordability. |
| Let your credit card protect you | Using a credit card for purchases of over £100 (and under £30,000) can offer you protection under Section 75 of the Consumer Credit Act if something goes wrong with the purchase. |
| Look for rewards | Many credit cards offer rewards such as cashback, air miles or points that can be redeemed in stores or online. |
| Make the most of balance transfers | Balance transfer credit cards can be a good solution if you’re looking for breathing space to pay off your credit card bills. |
Media enquiries to:
Becky Hume | 07387246305 | Becky.louise.hume@hsbc.com
Email: UKPressOffice@hsbc.co.uk
Notes to editors
1 Survey and carried out by Censuswide on behalf of HSBC UK. 2,006 UK respondents aged 18+. Carried out online between 18.8.23-21.8.23.
2 Source: HSBC UK. Figures correct as of October 2023.
3 In 2019, the average retail expenditure was £697, with transactions averaging £53 and customers typically using 21% of their credit limits.
Other findings:
More than half of Brits use their credit cards for regular purchases, like groceries or fuel, at least once a week (52%). Nearly three-quarters of people (73%) say they are confident in their understanding of credit card fees and interest rates.
The research found that consumers:
- Pay off entire balance each month (45%)
- Make the minimum payment (22%)
- Pay off as much as they can afford each month (16%)
- Pay a fixed amount each month (12%)
- A combination of the above (5%)
The survey also explored consumers understanding of their credit score. Just over half of respondents (53%) said they feel knowledgeable about their credit score and its contributing factors, with more than four in five (83%) understanding the potential impact of missing a credit card payment.
HSBC UK
HSBC UK serves over 14.75 million customers across the UK, supported by 24,000 colleagues. HSBC UK offers a complete range of retail banking and wealth management to personal and private banking customers, as well as commercial banking for small to medium businesses and large corporates. HSBC UK is a ring fenced bank and wholly owned subsidiary of HSBC Holdings plc.
HSBC Holdings plc, the parent company of HSBC, is headquartered in London. HSBC serves customers worldwide from offices in 62 countries and territories. With assets of $3,021bn at 30 September 2023, HSBC is one of the world’s largest banking and financial services organisations.