Why do people use credit cards?

Taking out credit can allow you to borrow money for a purchase upfront and pay later (usually with added interest). It can be useful for covering unexpected expenses or large ones such as buying a house. But what are the main reasons that people take out credit?

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Why do people use credit cards?

There are many reasons why people take out credit, and doing so responsibly can help improve your credit score.

Whether it’s an emergency situation, or you just want to spread the cost of a purchase, what are the main motivations for those taking out credit?

There are credit options for all situations too. For example, if you need to pay off debt but also make a large purchase, you’ll want to compare balance transfer and purchases credit cards.

We’ve surveyed Brits to see the main reasons for taking out credit and determine when and where people are most likely to do so.

What is the main reason people take out credit?

Graphic of reasons people take out credit cards

1. To spread the cost of big purchases - 24.1%

While people’s primary reasons for taking out credit were fairly different amongst those surveyed, the most common was to spread the cost of big purchases. Just short of a quarter of people said this was their main motivation.

This is because credit allows you to purchase things that you may not immediately have the funds for.

This could be an expensive household item like a TV, sofa, or kitchen appliance, or an even bigger purchase like a car. If credit wasn’t available, some of these purchases could take a very long time to save for.

2. To improve my credit score - 22.8%

Narrowly coming in second with 22.8% is the fact that taking out credit can improve your credit score.

Your credit score is based on your credit history, whether that is through paying back loans and your credit card balance, or your mortgage.

This credit score can determine whether you’re successful in taking out credit in the future. For this reason, many choose to take out credit to prove that they’re financially responsible when applying for a big loan such as a mortgage.

3. To earn cashback and rewards - 12.4%

Another reason why you might want to take out credit is the opportunity to earn cashback and rewards.

Some credit card providers will actually reward you when you spend money, either in cash or points that can be redeemed for discounts.

Some come in the form of vouchers at certain shops, while others will get you other rewards such as flights and hotel stays.

male female split of why you take out credit cards graphic

While the main reasons for taking out credit are fairly similar between men and women, there are some differences.

For example, while for women the main reason was spreading the cost of purchases (25.5%), for men it was improving credit scores (22.4%).

In addition, men were much more likely to take out credit to earn cashback and rewards, at 15.7% compared to 9.6%.

People of all ages take out credit, but their motivation for doing so differs. There definitely seems to be a generational difference in terms of the main reason for taking out credit.

Each age group below 35 said that improving their credit score was their main reason. However each of the groups 35 or above said it was to spread the cost of purchases.

Younger borrowers are more likely to use credit to access cash they don’t have upfront, as they’re less likely to have built up savings over time.

Interestingly, those in the highest and lowest earning income brackets are most likely to take out credit to improve their credit scores.

However, for those that fall in the middle, the most common reason was to spread the cost of big purchases.

Travelling overseas was the least popular reason across the board, with the exception of for the very highest earners.

14.3% of those who earn over £200,000 a year said that this was their main reason for taking out credit.

Why credit - image module

Finally, we took a look at all of the reasons that people said they took out credit (as opposed to just their main one).

This proved to be an incredibly close call, with almost half saying that they took out credit to spread the cost of purchases. That’s just 0.3% more than those who said that they did so to help improve their credit rating.

In third were those who said that they have credit cards in case of emergencies (36.9%) followed by those who want to access money upfront (31.1%).

The least popular reason to take out credit is for travelling overseas, with around one in seven falling into this category.

How many credit cards do people have?

graphic showing how many credit cards people have

Of those people who have taken out credit, the majority (52.5%) just hold one credit card. However, just over a third have two, while 13.8% have three or more.

Whether you need more than one credit card depends on your circumstances, but having too many could negatively affect your credit rating. 

The better your credit score is to begin with, the more cards you’ll likely be able to take out.

Why credit - image module

However, men are slightly more likely to hold multiple cards than women. 34.3% of men have two cards compared to just under a third of women, and 15.1% compared to 12.7% have three or more.

This shows that there are actually very few differences in the borrowing habits between genders.

In terms of differences between ages, it seems that generally speaking, you’re more likely to have more credit cards the older you get. Just under one in five 45 to 54-year-olds have three or more, compared to 0% for 16 to 17-year-olds and 7.2% for 18 to 24s.

Older people were much more likely to have at least two credit cards. For 35 to 44 and 45 to 54-year-olds, almost as many people had two cards as those who just had one. 

And finally, when it comes to income, the group most likely to have three or more cards is those earning between £76,000 and £124,999.

Conversely, the lowest earnings (those earning below £15,000) are most likely to just have one card, with around two-thirds doing so.

Those earning over £200,000 are twice as likely to have two cards than one, with a credit card bill less likely to be a problem. 

Where are people most likely to take out credit?

Map of where people are most likely to take out credit

Looking at the 100 most populated towns and cities, we also found the number of Google searches for ‘credit cards’ per 100,000 people.

Coming in first place is Preston, in Lancashire, with 6,270 searches per 100,000 people between August 2021 and July 2022. This was followed by Bedford, with 6,158 and Doncaster with 5,300.

In total, 8 of the top 10 places were located in the North of England, with four in Greater Manchester.

map of places where credit card interest has increased the most in the past ten years

In terms of the places where interest in credit cards has gone up the most in the last four years, these areas are more spread out across the country.

Milton Keynes saw interest increase the most, going up by 168.2%, followed by Stockport (157.9%) and Telford (148.4%).

However, a number of places have actually seen interest in credit decline. For example, in Sale, Greater Manchester, searches were down by 62.9%. This was followed by Sutton Coldfield (-50%) and Hartlepool (-42.3%).

When are people most likely to take out a credit card?

When people are most likely to take out a credit card

As we’ve seen, taking out credit can be driven by many different factors, and these can change throughout the course of a year.

Again looking at Google searches, this time averages for each month over the last four years, when are people taking out credit cards?

On the whole, the number of searches doesn’t fluctuate greatly throughout the year. However, November is clearly the most common month, with 150,000 average searches in the UK.

This is likely because November is the time when families start to spend more money ahead of the festive season.

However, credit card searches actually drop to their lowest in December (105,125), perhaps because the majority of their Christmas spending is done in November.

Searches then spike again in January, before going back to a fairly stable level for the rest of the year.

What are the most common types of credit cards?

There are lots of different types of credit card providers to choose from, perhaps more than you might think.

The right card for you depends on your circumstances, such as what you can afford and what your credit record is.

But which are the most common types of credit cards in the UK?

what type of credit card are people most likely to take out graphic

1. Purchase card - 36.65%

The most common credit card in the UK is the purchase card, with just under two-fifths of cardholders having one. 

These cards are ideal when looking to spread the cost of a big purchase and usually have an interest-free period, which helps to keep the cost down.

To get this interest-free period, you’ll need to make sure that you keep up the minimum payment though. They’re also difficult to get if you have a poor credit history.

2. Reward card - 28.30%

Reward cards actually give you stuff back for using them, whether that's in the form of cash or points that can be used.

Other rewards you can earn through credit cards include things like travel miles and money off in certain stores.

However, you usually have to pay an annual fee and they come with a higher interest rate, so make sure that you’re going to make full use of the rewards.

3. Balance transfer and purchase card - 28.25%

Narrowly behind reward cards are balance transfer and purchase cards. Balance transfer cards are useful for reducing the amount of interest you pay on an existing card.

They allow you to move your existing credit card debt over to them for a small fee and usually give you 0% or low-interest rates for a set period. However, you likely won’t be able to get one with a bad credit rating.

The credit cards with the biggest increase in searches 

To find out which cards have seen the biggest increase in interest in the last four years, we turned to Google search data.

Why credit - image module

Interest in no-fee cards has gone up by 38% in four years and they are cards that don’t charge you an annual fee.

Business cards come in second (36% increase), followed by student credit cards (23%), which can be useful for building credit for later in life.


What type of credit card should I get?

There are many different types of credit cards available, with pros and cons for each. Of course, the best one for you will depend upon your own personal circumstances.

For example, if you need to transfer debt away from an expensive credit card that you already have, you’d want a balance transfer card. Or if you want to make your spending work in your favour, you might want to look for a reward credit card provider. While if you’ve got a big purchase on the horizon like a holiday or furniture, then a 0% interest purchase card might be right for you.

As you can see, the answer is entirely dependent on what you want from a credit card.

When should I get a credit card?

Again, this depends on you personally and your circumstances. You can get a credit card once you turn 18, and there’s an argument for doing so if you want to start building your credit record.

However, those aged 18 and 21 have to pass a further legal check to ensure that they don’t borrow beyond their means at a young age.

Regardless of your age though, you should only get a credit card if the time is right for you. Things that you should ask yourself include whether you’re going to be able to make the repayments and whether you can trust yourself to spend responsibly.

If you feel that you can, then getting a credit card can be a good way to build your credit score.

Why use a credit card?

There are lots of reasons why you might choose to use a credit card. First, lots of cards come with specific benefits to users. For example, you might get cashback or rewards points such as air miles.

A credit card also allows you to build up credit, which is important if looking to take a big loan like a mortgage. They can also help to spread the cost of big purchases that you might otherwise be unable to afford.

Methodology and sources

Towns/cities: For each of the 100 most populated towns and cities in the UK, the number of searches for 'credit cards' between August and July 2021-22 and 2018-19 was sourced fromGoogle Ads Keyword Planner, before the four-year difference in searches was calculated.

Months: The number of searches for 'credit cards' in each month of the year for each of the last four years was sourced from Google Ads Keyword Planner before an average was taken for each month.

Types: The number of searches for each type of card between August and July 2021-22 and 2018-19 were sourced from Google Ads Keyword Planner before the four-year difference in searches was calculated.

The rest of the data was sourced via a survey of 2,000 people carried out via Pollfish on August 30th, 2022.

More credit card inspiration

Whether you're looking to get your first credit card to spread a large cost, a reward card for air miles or simply want to improve your credit rating, our expert guides will tell you everything you need to know about which credit card is right for you.

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About Salman Haqqi

Salman is our personal finance editor with over 10 years’ experience as a journalist. He has previously written for Finder and regularly provides his expert view on financial and consumer spending issues for local and national press.

View Salman Haqqi's full biography here or visit the money.co.uk press centre for our latest news.