One thing that has come out of the research is the way people are spending, by shifting from using credit cards, etc to using now preferring to use cash.  26% of Scots are preferring to purchase using cash which is up on the same time last year.  Londoners are about 20%, 29 in the Midlands, Wales and the rest of the South and 18% of Northerners.

On the up is the amount of 18-24 year olds using plastic to make there purchases, around 30%.  Peter Brooker, Head of Corporate Affairs at Paypoint says “”Young people may be storing up trouble for themselves, by racking up higher and higher debts on their credit cards, which they might not be able to pay back. Even much as worrying, only 10.9 per cent of this age group have had their credit card limit reduced, compared with 14.7 per cent of the 35-44 and 12.5 per cent of the over-55s.”

He continues “The credit crunch, economic downturn and widespread job losses have undoubtedly had an impact on people’s spending habits. Not just how much they spend, but how they spend it.  Overall, people in the Midlands and Wales seem to be taking a responsible approach, with more turning to cash to manage their spending more effectively (69 per cent) and far fewer maxing out on their credit cards – 2 per cent against 24 per cent of Londoners – which could explain why they are still less concerned about their debt level.”

“The most worrying aspect of the research is the attitude of young people who are continuing to rack up debts on their credit cards (at least, those who have them) and could well be storing up problems for themselves later as the economic crisis bites deeper. People who take a more careful approach and stick to cash – so spending only what they have – will emerge from the recession better able to recover financially.”

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Along with this another twelve cards have put up the interest on cash advances sometimes being an additional 5% interest added onto what is already an expensive way of getting cash.

11 balance transfer cards are also being changed by some providers where the transfer fee has gone up or there has been a reduction in the amount of time you have the 0% balance transfer period for.

Moneyfacts have noticed that in the last three months the average interest rate has risen from 16.8% to 17.2%.  Analyst for the group, Michelle Slade says “During the past year, card companies have continued to increase the charges on their cards and consumers will find they will be stung more severely than ever before.”

“Just like on mortgages, card companies are factoring in a much bigger margin for the risk of consumers defaulting, so rates are going up rather than down.”

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