Credit card spending 'underestimated'

Wednesday, October 12, 2005

Consumers are greatly underestimating the amount of use credit cards are getting, according to new research.

The investigation, carried out on behalf of egg, revealed that the amount consumers believed was spent on credit cards each year was £236 billion, when in fact egg says the total is £437 billion.

The online bank says this means that UK consumers are underestimating the amount they spend on credit cards each year by over £200 billion.

"Plastic is clearly the choice of the UK consumer when it comes to spending, but our Egg Money research clearly indicates that the increasingly complex nature of our finances means it is often hard to keep track of how much we are spending," said Andy Deller, egg's chief marketing officer.

It was announced by the British Bankers' Association (BBA) at the end of September that credit card spending had fallen for the second month in a row.

This has been put down to the decline in retail sales as well increased consumer caution regarding their spending.

This would seem to contradict the latest egg findings, which claim that people are unaware of what they are spending due to the confusing amount of payment options available.