Hints and Tips

Credit cards are these days being offered with all sorts of incentives - introductory periods, low APR's, cash back offers, no annual fees and many more.

You need to be disciplined if you want to borrow using credit cards because failure to clear debts could leave you with high interest repayments.

There is no "best card" available, it all depends on you, your lifestyle, your income and debt and exactly what you want to use the credit card for.

Market analysts Mintel discovered that 10% of credit card holders (around 2.3 million consumers) struggle to pay off the interest on their accounts each month, and permanently have an outstanding balance on their cards.

Almost one in seven adults (roughly 3.1 million cardholders) owes over £1,500 on credit cards; for two million consumers, this figure rises to £2,500. Those aged between 25 and 44 are the most likely to be seriously in debt: the number with a balance of at least £1,500 totals a fifth of this age group.

The results come just a week after analysts expressed serious concern over the recent £2.2bn hike in UK consumer debt. According to official figures from the Bank of England, consumers borrowed a record £10bn in June, despite a squeeze on their income caused by rising council tax and national insurance contributions.

Yet despite these concerns, the popularity of credit cards in the UK continues to grow. The number of cards in issue between 1995 and 2002 increased by a massive 108%, from 28m to 58m - a rise which is explicable in part by the tendency of people to have more than one card.

Since 1995, credit card spending has grown by 144% from just under £48bn to over £117bn in 2002. The growth in expenditure on credit cards has surpassed all other forms of credit: in 2002, borrowing on credit cards accounted for over 60% of total consumer credit.