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Consumers Keep On Flashing The Plastic

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http://www.guardian.co.uk/money/2010/may/28/card-spending-increases-healthy

Consumer spending on credit and debit cards across Europe jumped in the first three months of the year, according to figures from payments group Visa which show an even stronger bounce-back than official EU data.

Total spending on Visa cards was up 9% to €230bn in the first quarter; the rise registered by official data from Eurostat was just 4%.

The figures showed that spending this year has increased at a faster rate than before the recession, when it peaked at 5.8% at the end of 2007.

Visa, which is owned by a group of major banks, said the increase in sales on its cards came despite a steep decline in the value of each transaction. The figures were also adjusted to take account of a steady increase in the number of cards in circulation.

Moreover, monthly data derived from transactions on 339m cards points to further rises in spending during April and a strong start to the second quarter.

Visa figures are likely to reflect the purchasing habits of higher income groups than those used by Eurostat, but the group's transactions now account for €1 in every €9 spent in Europe.

Steve Perry, commercial director at Visa Europe, said the figures, put together with consultancy Markit Economics, have proved to be a good predictor of official data.

He said: "Consumer spending was hit hard by the recession but has bounced back surprisingly quickly. Growth is now faster than it was before the recession. This is very positive for the health of the European economy as a whole, as consumer spending is such an important engine of growth.

Perry said his optimism was tempered by the prospect of austerity measures in several European countries creating uncertainty and denting confidence: "Optimism needs to be tempered, however, as the economic situation in Greece and concerns about the fiscal position of a number of other European states means the outlook is uncertain. It remains to be seen whether spending will continue to grow at current rates."

The average amount spent in each transaction has declined in recent years, from around €53 in 2008 to below €49 this year, he added. "This reflects growing consumer and retailer preference for the use of cards in low-value transactions. The recession accelerated this trend however, as rises in unemployment, weak employee earnings growth and heavy price discounting all had an impact on average transaction values."

I'd be interested to know how many of these transactions are cleared in full for the credit cards.

It's the plastic recovery.

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They keep dancing while the music keeps playing!

Rather like a number of local BMW drivers around my way, they can't afford to run their X5's..........they stopped paying for them.............but there is no sign of the repoman........thus while the plastic still works & the car is still on the driveway......they use it.

Wait till HIGH rates kick in & credit is limted!!!

;)

Mike

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http://www.guardian.co.uk/money/2010/may/28/card-spending-increases-healthy

I'd be interested to know how many of these transactions are cleared in full for the credit cards.

It's the plastic recovery.

It's the plastic death..... Ding Dong..'Bring out your debts, bring out your debts. Unclean, unclean...'

We ain't got no ....ing money, so we eat plastic and hope we will not die.

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I have anecdotal evidence to back this up! You're going to reply to this with "you stupid twit" but at the time I was pished as a fart and decided to see how many CCs I would be accpeted for! Well I applied for eight and five accepted me! The credit limit of these cards combined is about 30K. American Express was the most shocking as they called me to let me know that I'm now an American Express Card holder and have been enrolled in the British Airways Executive club as a Gold Card holder? WTF I thought? Then the guy on the phone started to ask me my interests, fave holiday destinations blah blah blah. At the end of his questions he then said "well your limit was 10k but I've now upped that to 18k to cover your hobbies and holidays"...again I thought WTF?

So now I have 5 CCs...I only really wanted one for emergency car repairs (cos it's always cars that catch me out) but was shocked that I got this far! Sooner or later they'll take them off me I reckon when they notice I ain't using them! Anyway, the other four are BarclayCard at 7.9%, MBNA at 12 %, Capital One at 14% and Egg and some other shite APR.

Guys, I was pissed at the time and was also contemplating leaving the country. However, I have a personal loan that i may transfer across to these cards as even with the balance transfer fee, the interest will be still quite low!

However, I have to apologise to you guys for applying for so many CCs in the space of 10 minutes. i have everything that I want so do not intend on using them!

Edited by Chest Rockwell

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Using cards for smaller transactions?

Food? Fuel? Other essentials?

Indeedie. I expect the UK average transaction size is quite lower than the €50 ballpark, 'cos we routinely use them for small transactions, with under-a-tenner being not unusual.

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I have anecdotal evidence to back this up! You're going to reply to this with "you stupid twit" but at the time I was pished as a fart and decided to see how many CCs I would be accpeted for! Well I applied for eight and five accepted me! The credit limit of these cards combined is about 30K. American Express was the most shocking as they called me to let me know that I'm now an American Express Card holder and have been enrolled in the British Airways Executive club as a Gold Card holder? WTF I thought? Then the guy on the phone started to ask me my interests, fave holiday destinations blah blah blah. At the end of his questions he then said "well your limit was 10k but I've now upped that to 18k to cover your hobbies and holidays"...again I thought WTF?

So now I have 5 CCs...I only really wanted one for emergency car repairs (cos it's always cars that catch me out) but was shocked that I got this far! Sooner or later they'll take them off me I reckon when they notice I ain't using them! Anyway, the other four are BarclayCard at 7.9%, MBNA at 12 %, Capital One at 14% and Egg and some other shite APR.

Guys, I was pissed at the time and was also contemplating leaving the country. However, I have a personal loan that i may transfer across to these cards as even with the balance transfer fee, the interest will be still quite low!

However, I have to apologise to you guys for applying for so many CCs in the space of 10 minutes. i have everything that I want so do not intend on using them!

Way before all this kicked off I used to collect them like confetti for the 0% balance transfers at one point about 5 years ago I had about 5 or 6 cards with a combined credit total of £30k, that could have been one hell of a weekend spend if I'd gone for it, but there was no way in hell I'd be able to even service the debt let alone pay it back.

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This is very positive for the health of the European economy as a whole, as consumer spending is such an important engine of growth.

One important key to recovery & a healthy economy is absorption.

For instance: doing my bit for the Portuguese economy yesterday entailed my taking four hours over lunch in my favourite cafe

The UK needs to work more on this.

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Are you sure it's the same people?

Personally i've always been a tight ****, borrowed little, always maintained at least 6 months income as liquidity, don't have a flat screen TV or a fancy phone. In the last 3 or 4 months i've saved nothing, and spent considerably more than i normally would. No particular reason for this.

Conversely, some friends (who have a huge neg equity mortgage and £30k credit card debt) are doing some serious belt-tightening

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I have anecdotal evidence to back this up! You're going to reply to this with "you stupid twit" but at the time I was pished as a fart and decided to see how many CCs I would be accpeted for! Well I applied for eight and five accepted me! The credit limit of these cards combined is about 30K

However, I have to apologise to you guys for applying for so many CCs in the space of 10 minutes. i have everything that I want so do not intend on using them!

Wot??

Last year I applied for a Visa card. Only £5,000 limit. Have no other credit cards.

No history of debt default. As safe an income as you could reasonably hope for (I am an NHS Consultant, FFS). A fair bit saved up. Mortgage paid off.

Turned down flat by return of post......

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I for one am extremely glad i'm not an NHS Consultant..... safe as, erm, houses?

Fair point. But it looked safe last year, which is when I applied for the card. I'm well aware that, as a front-line NHS worker, I'm right in the firing line now.

What a difference a year makes.....

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Fair point. But it looked safe last year, which is when I applied for the card. I'm well aware that, as a front-line NHS worker, I'm right in the firing line now.

What a difference a year makes.....

I think you'll be alright if you're a 'proper' consultant (ie: a doctor)

It's those management 'consultants' that are going to get it up 'em (it was unclear which flavour you were)

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I think you'll be alright if you're a 'proper' consultant (ie: a doctor)

It's those management 'consultants' that are going to get it up 'em (it was unclear which flavour you were)

I'm a medic. I'd be first in the queue to stop the NHS squandering zillions on management consultants.

But I'll bet they can get a credit card approved....

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Some people are using cards to pay for their groceries, petrol, everyday stuff like that. I have a friend who does that to collect Nectar points. However, she's fairly well off and clears the card every month. I wonder how many don't, because by the time they've serviced their debts, they can't pay for the necessities of life.

This story on MSN

Alarm at credit cards for groceries

One in seven people are relying on their credit card to pay their household bills, a survey has shown.

Around 14% of people admitted that they regularly used their plastic to meet bills, such as the cost of gas and electricity, according to moneysupermarket.com.

A further 7% of people said they also regularly used their credit card to get cash advances, despite the high interest rates providers charge for this.

More than half of consumers said they used their credit card to fund big ticket items, such as buying a television or DVD player, while 43% regularly used it pay for grocery shopping and 38% relied on it to buy petrol.

Kevin Mountford, head of banking at moneysupermarket.com, said: "Used responsibly, credit cards can be an integral part of household budgeting but it's alarming to see so many people using their cards to pay for what should be everyday spending.

"If you are using a card in this way, and not paying off the full balance each month, then you really do need to review your circumstances, as this is the first sign of financial difficulty."

He said as a general rule, people should only use a credit card to buy something if they could repay the debt during the lifespan of the purchase.

For example, using a credit card to buy a television made financial sense if you could clear the balance before an interest free period on the card expired, but taking several months to repay debt run up doing the weekly grocery shop should ring alarm bells.

Opinium Research questioned 1,933 people between April 27 and May 3.

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Some people are using cards to pay for their groceries, petrol, everyday stuff like that. I have a friend who does that to collect Nectar points. However, she's fairly well off and clears the card every month. I wonder how many don't, because by the time they've serviced their debts, they can't pay for the necessities of life.

I use my credit cards to pay for practically everything I can, since I get Tesco points on the Mastercard and Air Miles on my Visa. Much handier than cash too.

Paying them is as simple as a couple of mouse clicks once a month and as I clear them in full every month the additional financial cost of use to me is zero - it'll be those paying cash who are subsidising the transaction costs for the credit card users and those not paying off in full that give me my free credit and perks. I have zero percent interest on the Tesco card so I actually leave a tenner outstanding so as to boost my credit profile a bit further (as someone carrying a balance but making payments).

It's increases in total outstanding CC debt older than a certain age that would indicate people being broke and falling back on cards, I don't know if detailed stats for that are publicly available.

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Might as well party on, if you know you're going to end up bankrupt anyway. 'Society' can pick up the tab.

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Wot??

Last year I applied for a Visa card. Only £5,000 limit. Have no other credit cards.

No history of debt default. As safe an income as you could reasonably hope for (I am an NHS Consultant, FFS). A fair bit saved up. Mortgage paid off.

Turned down flat by return of post......

Well it turns out this the one card I got with the biggest limit is not accepted anywhere LOL! American Express! Tried to by a monitor for my Roland Fantom X8 at a rather large music shop and they told me to naff off when I presented them with the card! Even though they had an Amex sticker on the door they told me that they have now stopped using Amex. So I coughed up in real cash via me trusty debit card! i was even ready to buy a Fantom G8 ex demo for £2k then flog the fooker on ebay just to get some more air miles...but alas it wasn't to be!

You're probably wondering why I wanted to use my Amex card? Well if I spend 500 quid on it in the next 3 months I get 1000 BA airmiles. So I thought I'd get started with a Monitor...but that went tits up! Today I thought I saw a pontential 3000 BA air miles!

So on the way home, I thought well I'll start by filling up me gas guzzler of a car! Filled it up at a BP station, handed over the Amex card and the computer said 'no' to the kid serving. He then asked the lady manager if they accept Amex and she said "no". And I said "oh" and then she said "that's what you get for showing off!"...so I paid again by debit card.

I can see this Amex card getting taken off me as time goes on! No-one really accepts them and I ain't interested in buying TVs etc.

Don't worry, the intention WAS to pay off the stuff before the APR hits as I do have the cash...I just fancied them Air Miles and want to use my BA Exec Gold card to mingle with the posh barstards in the Airport Exec Club...LOL!

Don't think it's gonna happen though! :(

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Paying them is as simple as a couple of mouse clicks once a month

Too much faff. And too much risk of forgetting, unless you're better-organised than me. And do you have redundant systems, in case your 'puter or internet connection go titsup at a critical moment?

I use direct debit. No effort, none of the above worries. Don't even have to watch the account balance, as it goes out just after the paycheque.

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I have anecdotal evidence to back this up! You're going to reply to this with "you stupid twit" but at the time I was pished as a fart and decided to see how many CCs I would be accpeted for! Well I applied for eight and five accepted me! The credit limit of these cards combined is about 30K. American Express was the most shocking as they called me to let me know that I'm now an American Express Card holder and have been enrolled in the British Airways Executive club as a Gold Card holder? WTF I thought? Then the guy on the phone started to ask me my interests, fave holiday destinations blah blah blah. At the end of his questions he then said "well your limit was 10k but I've now upped that to 18k to cover your hobbies and holidays"...again I thought WTF?

So now I have 5 CCs...I only really wanted one for emergency car repairs (cos it's always cars that catch me out) but was shocked that I got this far! Sooner or later they'll take them off me I reckon when they notice I ain't using them! Anyway, the other four are BarclayCard at 7.9%, MBNA at 12 %, Capital One at 14% and Egg and some other shite APR.

Guys, I was pissed at the time and was also contemplating leaving the country. However, I have a personal loan that i may transfer across to these cards as even with the balance transfer fee, the interest will be still quite low!

However, I have to apologise to you guys for applying for so many CCs in the space of 10 minutes. i have everything that I want so do not intend on using them!

Out of my circle of maybe 50 close friends I know of at least two who have quite deliberately applied for as many credit cards as they can get their hands on, and over a period of of a few years gradually built up the credit limits before finally maxing them out in a massive splurge of expenditure.

A quick visit to the county court to file for bankruptcy and the whole lot is written off.

One friend then emigrated to be reunited with his ill-gotten gains; the other is happily awaiting his 12-month discharge in his nice 4-bed detached house which the OR allowed him to keep, along with his two cars and profitable business which was set up to a large degree by purchases bought on the credit cards.

If I know two people who have planned and financed their lifestyles in this way then there must be hundreds of thousands doing the same.

Good luck to 'em!

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Out of my circle of maybe 50 close friends I know of at least two who have quite deliberately applied for as many credit cards as they can get their hands on, and over a period of of a few years gradually built up the credit limits before finally maxing them out in a massive splurge of expenditure.

A quick visit to the county court to file for bankruptcy and the whole lot is written off.

One friend then emigrated to be reunited with his ill-gotten gains; the other is happily awaiting his 12-month discharge in his nice 4-bed detached house which the OR allowed him to keep, along with his two cars and profitable business which was set up to a large degree by purchases bought on the credit cards.

If I know two people who have planned and financed their lifestyles in this way then there must be hundreds of thousands doing the same.

Good luck to 'em!

i worked with a chap back in the 90s at a big logistics outfit. He was a young-ish chap and seemed to be going places as his position at the company was as a manager and he was quite well liked. I remember that him and his missus were expecting a baby and towards the end of the pregnancy something happened, I think it might of been a still birth, Anyway, since that event the poor chap just completely changed! When he came into work each day he looked as if he'd been crying for about hours before. Even when people would speak with him his eyes were just full of tears. This went on for months and I didn't see and end to it as I believe he then went off on long term sick as he nearly had a punch up with his manager.

Apparently, he then declared himself bankrupt and left the country. Turned out that he'd split with the wife and then thought "f*ck this" and took out as many CCs, loans and overdrafts in his and her name as he possibly could. Rumour was that he'd raised over 250k or something like that.

That was the last I heard of him!

But there was something that I could never understand with people that do this with credit cards. Just how do they extract the money from the card? You can only withdraw so much from an ATM on them, so how do they get the rest? Is it a case of say, for example, using a card with a 25k limit to buy a new Focus ST and then sell the Focus ST to realise the cash? And then rinse and repeat with other cards?

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  • 277 Brexit, House prices and Summer 2020

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      • down 5% +
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