People owe more on their credit cards than ever before with the average adult having a debt of more than £1,100, new research shows.
Britons now owe more than £1,000 on credit cards, on average
Credit card debt has risen by nearly two thirds over the last four years - in 1999, the average debt was £719.
The UK's total outstanding debt on cards was £53.5bn in 2003, with 65.5m cards in circulation.
But, market analyst Datamonitor said, the debt will only become a cause for concern if people cannot pay it back.
The group said the strong growth in cards suggested UK consumers were becoming more and more comfortable with using them, and showed the market had defied predictions that it was becoming saturated.
And it said the highly competitive market was likely to keep credit card payments affordable.
By 2008, the research predicted, more than 90 million cards would be in circulation - which is almost two for every British adult.
And it noted that so-called "rate tarts", who shop around for the best interest rates and take out new cards to keep their payments as low as possible, contributed to the rise in the number of cards in circulation.
According to report author Kieran Hines, the rapid growth is manageable - as long as repayments stay that way.
"The competitiveness of the credit card market will continue to provide consumers with low rate balance transfer options and competitive standard rates," he said.
"This will allow the financially aware to keep their interest payments low."
But, he warned, any interest rate increase would put pressure on mortgage repayments and may have a knock-on effect on the ability of some people to repay their credit card debt.
You sent us your experiences of credit card management
I have three credit cards. One I use for spending (clearing the balance each month), and the other two I use for their 0% borrowing facility.
This free borrowing capacity has been really useful in filling a financial hole in between jobs. I have switched the cards twice from lender to lender, and never paid a penny in interest. Caution: only for the financially careful!
How short people's memories are. Late 1980's saw an increase in interest rates and major debts. Overnight houses could not be sold, mortgage rates went up and stayed there. The current purchasing trends on credit will only end in misery when the bubble bursts, everything turns full circle.
Having worked in the Finance industry for a number of years, I would say that I'm reasonably good with my Credit Cards. I currently have six, of which only two I use. I generally get a new card and transfer all the balances for the first x number of interest free months. This has saved me in the region of £300 so far this year. My brother on the other hand, has four cards which are all up to the limit, he finds it extremely difficult to cover the minimum payments let alone trying to reduce the actual balance. I would view myself and my brother as the prime example of someone who is smart with their money and someone who is ignorant of the ways they can reduce their costs. I honestly think that there is not enough information out there for people who do not understand how their card works and the best ways to approach them. Something should be set up for people to have a better understanding.
Is it any wonder that so many people have credit card debts when consumer law is so biased towards the use of credit? I want to shop online but have been told I am only covered if I use a credit card and not a debit card. So, after years of being free of debt, I must now get a credit card just so I can safely shop online.
This is madness! The law on credit cards must be changed!
David Fulford-Brown, Cambridge, Cambridgeshire
I never used credit cards until they introduced the no interest for 6 months offers. I haven't paid any interest on my card for 3 years now and always switch my card when I am due to start paying. I find it much easier to have it all on one card rather than interest free credit all over the place. I must admit I'm surprised I haven't been banned from moving to other cards as they don't make any money from me!
Sue , Uttoxeter, Staffs
I previously never used a credit card but have recently bought a first home with the deposit partly funded part by credit card. By being a so called "rate tart" this is cheaper than a bank loan. I suspect the growth in credit card debt may well be related to the property market and other first time buyers having to look at all the options to raise the large deposits required.
Nick Putnam, Bristol
It is far too easy for young people to get credit cards. The Government needs to start looking at the practices of these companies who entice young vulnerable people only to leave them with enormous debt.
Rob, Amersham, Bucks
I earn £13,500 and with credit cards I've got and been offered I could run up debt of over £40,000!!! The system needs to be regulated to stop people getting into that sort of mess as it just adds to an already stressful lifestyle.