Thu, 22 September 2022 | consumers economy
As the cost-of-living crisis bites, Marqeta, a global credit card issuance platform, revealed new research finding that over half (48%) of UK consumers questioned find it difficult to make the minimum monthly payments on their credit cards. The poll of more than 1,000 UK consumers reveals that as the country transitions from the pandemic to the cost-of-living issue, individuals have merely switched their financial concerns. With 57% of those surveyed reporting using credit cards to make ends meet over the past year.
Consumers in Generation Z are even more dependent on credit; 68% of respondents in the 18–25 age group said they rely on credit cards to make ends meet. Consumers are also becoming more financially wise as a result of the growing cost of living; 64% of poll participants said that over the past year, they had grown more conscious of budgeting and saving.
According to Anna Porra, European Strategy Director at Marqeta, "UK households are fighting against the rising tide of the cost-of-living problem, but credit and smart budgeting can help them stay afloat." The energy price cap is expected to increase once more in October, which may make consumers' financial worries worse. Banks must now do more to help struggling families by providing flexible lending options, wise budgeting tools, and improved spending information. For banks to remain "top of wallet," they must create individualized, user-friendly loan choices that assist consumers in navigating growing pricing.
The study also reveals that UK consumers' concerns about inflation and the cost of living are having an impact on their purchasing behavior. 73% of those polled claimed they would cut back on their expenditures, while 54% admitted they had to put off making a large buy on credit because of their current worries. Consumers still rely on credit and are aware of what they want from their credit cards. Refund protection on purchases (42%), fraud protection (39%), and the opportunity to make purchases without having to wait for payment (37%) were listed as the three most important advantages of credit cards.
Source: Marqeta