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money.co.uk comment: spending on credit cards overtakes cash

As spending on credit cards overtakes cash for the first time, money.co.uk advises consumers on the potential issues caused by contactless and credit card payments

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Salman Haqqi, personal finance expert at money.co.uk, comments:

As we move further towards a cashless society, we must ensure that our use of debit and credit cards does not go unchecked, drive overspending and land us in debt that we can't afford to pay.

The rise in contactless, which was recently reported to now account for 45% of debit card transactions, means that it is easy to lose track of how much you're spending.

You need to become best friends with your banking app to keep tabs on where your money is going and avoid fees for exceeding your limits. Be vigilant; if you don't recognise a transaction, no matter how small, make sure you investigate it.

It's handy that the payment cap is currently just £30 this stops you from going crazy on the spending without having to think about it properly first, however - contactless payments can take a day or two longer to show up in your account compared to chip and pin, which can be frustrating and make it harder to keep a close eye on your outgoings. It would be good to see merchants and banks working together to rid the system of this delay.

There is a worry because contactless cards don't have a daily limit, if your card is stolen you may not realise and it could be used for multiple transactions. If you notice your card is missing you must contact your bank ASAP and cancel the card. There is sometimes a delay in the cancellation period meaning in some cases the card could still be used. Make sure you continue to check your bank statements for the coming months. Once you report a missing card, any money has been taken fraudulently from your account, you will be reimbursed by your bank.

Credit cards have become more popular than cash because they are easy to use, safer than carrying cash, provide protection and allow us to purchase now and pay later. But with that flexibility, there is the danger that many people are over stretching themselves and buying on credit, with no means to pay off the debt.

Credit card interest rates on balances are now at the highest level in more than a decade. This shows the importance of using a credit card sensibly and responsibly and not letting debts get out of control.

Before applying for a credit card, ask yourself, will you be able to pay back the balance every month? If you're only making the minimum payment at the end of each month, the debt you owe will take much longer to pay back, and interest will be added to the outstanding balance.

Also check what the interest rate will be once the introductory period is over, and make sure you're in a position to repay the balance before the deal ends, as in many cases the interest rate will rise significantly once it does.


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Salman Haqqi

Salman Haqqi, Personal Finance Editor

Salman Haqqi spent 10 years as a journalist reporting in several countries around the world. Salman left the world of journalism and moved to the UK to pursue a passion for personal finance and a desire to help people make informed financial decisions.

Read Salman Haqqi's articles and guides
Joel Kempson

Joel Kempson, Personal Finance Writer

Joel Kempson devotes his time to helping people navigate the world of personal finance and make informed decisions about their money. He spent his early career writing about TV, movies, comic books and rock music.

Read Joel Kempson's articles and guides

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.