Marking the 50th Anniversary of the Credit Card – Does It Serve Us Well?

The 50th anniversary of Barclaycard, the credit card that helped usher in a revolution in the way we spend our money has recently passed. The credit limit may have been a mere £100 to begin with, but it provided convenience and new freedom, especially for those who travelled or needed to make larger purchases. Fifty years on, plastic cards have become an essential part of our lives and have paved the way for new and innovative cashless methods such as contactless payment and online payment services such as PayPal.

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Ease and Convenience

According to a report by the UK Cards Association, some 75% of all retail sales were transacted using credit or debit cards in 2014, and £21 out of every £100 was spent online. From purchasing a new pair of shoes to a family holiday, the credit card has proved itself as an ideal method of payment – it’s difficult to imagine life without it now. However, as with all types of borrowing, the use of credit cards has created problems of its own.

Contributor to Debt

While around 80% of credit card spending was repaid in full, there are those who struggle to repay. As interest charges mount up, an increasing credit card bill is a common contributor to situations where household debt levels spiral out of control. There are plenty of advertisements for various debt solutions such as consolidation loans, an IVA (Individual Voluntary Arrangement) and bankruptcy, but in many cases, a change of lifestyle and switching mobile, internet or energy providers to reduce outgoings is all that is needed to help reduce debts. If you run your own business and are finding it difficult to repay items on your business credit card it is important that you discuss this as soon as possible with yout Cheltenham accountants such as to find out if there are any possible solutions to your cash flow issues before this has a detrimental effect on your business.

The more drastic solutions, which include writing off a portion of the debt, may seem attractive in the short term but come with their drawbacks, too. Consider the pros and cons very carefully before taking that route, as it can have an effect on your credit rating and therefore your borrowing ability in the future.

As the credit card passes its 50th birthday, it’s important to remember there is a generation of people now who have never known life without paying with plastic. A tool used in the correct way gets the best results, and when used responsibly, a credit card can be everyone’s best friend.