People are increasingly using credit cards as an alternative to personal loans, it has been claimed.
Steve Willey, head of credit cards at Moneysupermarket.com, explained that in the past people had used cards solely for short-term borrowing .
Now, people often borrow on a credit card and then transfer the balance several times, taking advantage of deals on interest rates to spread the cost of their spending.
He said: "The credit card market is becoming increasingly segmented. There are still the traditional users who use their cards to make purchases they pay off each month, but for the one in three people using their cards as pseudo loans, most are saving money over traditional personal loans."
He added that as long as consumers are disciplined in not making more purchases after a balance transfer, they will save money .
Yesterday, MoneyExpert.com claimed that credit card companies across the UK have cut the spending limits of their customers by a total of £3.1 billion.
News Side
Credit cards used as an alternative to personal loans
Tue, 08 Apr 2008
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