Has The UK Become A Nation Of Plastic Card Junkies?

For the first time, 2005 saw more plastic cards issued in the UK than there are people. Today there are over 73 million plastic cards in circulation and over 1,300 plastic card providers. Has the UK become a nation of plastic card junkies?

The numbers would certainly seem to indicate that the UK has indeed become a nation of credit, card, and debit card junkies. Encouragingly, however, are figures which show that 40% of credit cardholders in the UK repay their full outstanding balance on their credit card statement payment date. Also, firs the first time in a decade, debt of UK credit card fell in the first quarter of 2006. These figures show that UK plastic card users would now appear to be more educated about the dangers and benefits of using plastic cards, and also more able to keep their credit card debt under control. Given this, would there really be anything wrong if we were a nation of plastic junkies?

The benefits of plastic over other payment methods

Consumers in the UK are now finding that using plastic has many advantage that other payment methods, such as cash and cheques, simply does not provide. These include:

• being covered under insurance policies, should the product be defective
• with product price increases, not having to carry large sums of cash around. Instead you’re left with the relative safety of having a small amount of cash and a plastic card or two
• never having to worry if you have the right amount of change to purchase something
• being in a position to competitively shop on the internet using a plastic card
• being able to shop without being restricted by any minimal maximum amounts, such as with the £100 cheque guarantee card

The pitfalls of plastic over other payment methods

Primarily, the main pitfalls of using plastic over other, more traditional forms of payment in the UK, are:

• that you cannot manage your budget properly, become money is no longer “real”, and you find yourself falling easily into the debt trap;
• you become and “impulse” buyer who finds themselves buying expensive clothes, etc. on impulse, because it is “easy”, rather than giving it some thought to decide whether you can afford the item and whether you really need it.

Should we be worried by the amount of plastic card use?

Provided that you are a sensible plastic card user, who tries not to carry large sums of debt on your credit card at high annual percentage rates, and provided that you are not paying excessive fees and charges, there shouldn’t be a major concern if your main form of payment is plastic instead of another payment method. Indeed, with the number of interest free credit days that you can get with UK credit cards, the peace of mind knowing you can shop safely in peace, and the relative ease of using plastic cards, not only in the UK but worldwide, should all be sound reasons why we should become a nation of plastic junkies.

Richard Smith
8th July 2006

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