Credit Cards and Olympic Spending

he UK runs on plastic. Consumers use debit or credit cards to pay for products, services, and everyday purchases. But charging all this to a card can quickly rack up a mountain of debt. We examine how people accrue and pay off debt, how young people in the UK understand credit, and why analysts predict a credit card boom this summer. HOW CONSUMERS USE T Credit in the UK Credit Card Debt in the UK UK HOUSEHOLDS SWIMMING IN DEBT UK consumers are no stranger to incurring and maintaining debt. Though they're slowly paying down their balances, they still have a way to go. AVERAGE HOUSEHOLD'S UNSECURED DEBT £7,900 AVERAGE HOUSEHOLD'S DEBT PAID OFE IN 2011 £355 AVERAGE CREDIT CARD BALANCE £1,000 £2000 £4000 £6000 £8000 CREDIT CARD HOLDERS WHO USE CARDS REGULARLY CREDIT CARD USE ON THE DECLINE The number of people who use their credit or charge cards once a month is falling as more consumers adopt debit cards. 2009 2010 20.2 MILLION 19.8 MILLION CREDIT CARD DEBT ON THE DECLINE UK TOTAL CREDIT CARD DEBT As credit card use is falling in the UK, total credit card debt is falling as well from a peak in early 2006. 2006 £69 BILLION of credit card holders 2010 62% pay off their balance in full each month. £57 BILLION Young Britons Clueless About Credit STUDENTS USE BUT DON'T UNDERSTAND CREDIT EDUCATION TO PREVENT CREDIT MISHAPS IN THE FUTURE Both teachers and students alike feel that more time should The next generation of young people is expected to take on more debt. Though many young people use debit and credit cards, very few actually understand the terms. be spent educating young people on basic financial skills to possibly help avoid credit card debt. 95% of youths aged 16-18 have a debit card. BUT 27% of students believe their education has 1 IN 4 given them basic budgeting skills. don't understand the term "debit" 94% 1 IN 5 16 to 18-year-olds has store credit card. BUT 1 IN 3 OF TEACHERS BELIEVE TEACHING FINANCIAL EDUCATION SHOULD BE don't understand the MORE COMPREHENSIVE. term "credit". Credit Card Use at the Olympics CREDIT CARD USE EXPECTED TO SOAR PER CENT GROWTH IN VISA CARD EXPENDITURES Based on the growth in purchases on plastic during events in the last few years, world sporting events are a catalyst for credit card spending. DURING EVENTS (Compared to Previous Year) +15% +93% +82% Beijing 2008 Summer Olympic Games Vancouver 2010 2010 FIFA World Winter Olympic Games Cup South Africa CHARGE-HAPPY CUSTOMERS AT THE GAMES Both previous Olympic Games spurred a flurry of credit card transactions from international visitors and added up millions in spending every day. BEIJING 2008 SUMMER OLYMPIC GAMES DAILY VISA TRANSACTIONS: 840,000 AVERAGE DAILY SPEND £6.6 MILLION 8. VANCOUVER 2010 WINTER OLYMPIC GAMES DAILY VISA TRANSACTIONS: 1.14 MILLION OLYMPIC CLUB CARD AVERAGE DAILY SPEND 000 £4.5 MILLION SOURCES: PRICEWATERHOUSE COOPERS, THE UK CARDS ASSOCIATION, VISA, CHARTERED INSURANCE INSTITUTE Confused.com