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For some it is a pleasure, and for others out-and-out a pain. How you experience the sliver of plastic we call a credit card, goes beyond praising or hating. It is your spending- and payment behaviour patterns that could well be making the difference.

Christmas 2007 was put on credit. £2 billion of food and drink was brought last December by consumers using their credit cards. New figures show that this was 25% more than December 2006.

Debt charities said that they had been experiencing record numbers of calls from people worried about their debts since mid-January, when Christmas credit card bills started to arrive. Total credit card debt increased by £300 million last year to £56.1 billion in December.

A recent survey, carried out by financial researchers, has produced figures showing that 1 in 10 Brits are spending more than their wages permit. Furthermore, of the 4,200 surveyed, almost 20% are leaving themselves short at the end of the month relying on overdraft facilities and credit cards to bail them out in order to keep on top of monthly bills and expenses.

The Association of Payment Clearing Services (Apacs) which represents lenders and credit card companies has released figures which show that £32.4 billion was spent on credit cards by Britons during the final quarter of 2007 - the second-highest figure ever recorded by the association beaten only by the final quarter of 2004, when cheap credit card deals were more readily available..

Although higher prices can contribute to some of the spending , recent figures show that the cost of food and drink has risen only by about 6% and analysts suggest that this year’s rise in credit card use can be attributed to the payment method being used by more people to pay for gas, electricity and other utility bills. Credit and debit card spending rose to £91.5 billion, up from £86.6 billion in the last three months to September 2007. This indicates that we are seeing people shifting spending on to credit cards as household expenses mount up.

As household budgets are squeezed, people may start to use their credit cards to pay for shopping. This is a. While some people will be taking advantage of special credit card deals to earn points or cash back, many others will be simply using their card to put off paying the bill.”

The main point is that there is a clear link between household financial distress and the use of credit cards to fund normal household spending. This is a leading indicator of debt trouble. Consumers who are using their credit card to cover household expenses should seek help immediately.

Apacs said that repayments of credit card debts, calculated by comparing the total amount of repayments to the total sums lent during the same period, was 96 per cent last year.

This is lower than in 2006, when repayments were at 97 per cent. Repayments in December fell to 86 per cent.

A spokesman for Apacs said : “The repayment data is key. People are repaying more on their credit cards than they were five years ago.

“We would be really concerned if repayments had stayed at under 90 per cent like they were in 2001-02.”

It is not the size of your credit card spend that counts, but what you are buying. You know your debt is rising, but you just can’t seem to stop using your credit cards. It’s quite easy to grow dependent on credit cards for impulse buys and even everyday expenses. But, if you’re starting to drown in your debt, you have to stop using your credit cards before the debt completely takes you under.

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Steve

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