Forty nine per cent of consumers say no to credit this year

Callcredit Information Group’s latest research has revealed a change in consumer attitude towards utilising credit with forty nine per cent of consumers confirming they have no plans to use credit this year, with over a third opting to use credit only to take advantage of rewards and cash backs.

The independent research undertaken by YouGov* highlights how consumers are managing their finances and use credit out of a desire to use it, rather than a need to, compared to previous independent research**. 

The research looked into consumer behaviour around borrowing, which types of credit consumers intend to use this year, the main reasons for borrowing, the factors and rewards which appeal most and how they specifically manage their credit cards. The main findings show that of those UK consumers that are planning to use credit in 2015, credit card usage is the most popular at 42 per cent, followed by an overdraft (16 per cent) and only a small percentage opting to use personal loans (5 per cent) or short term lending (1 per cent).

Callcredit has also been able look at the research at a more detailed level through the use of its CAMEO UK segmentation tool and has categorised respondents into ten different socio-economic groups ranging from ‘Business Elite’ to ‘Family Value’. 

When asked, ‘Which type of credit do you think that you may use in 2015’?  

  • 56 per cent of the ‘Family Value’ group,  
  • 53 per cent of  ‘Content Communities’  
  • 52 per cent of ‘Flourishing Society’ group

All confirmed that they had no plans to borrow at all in 2015.

  • 55 per cent of ‘Prosperous Professional’ chose a credit card and of those that did: 
    • 72 per cent indicated they would pay the account off in full each month
    • 45 per cent planned to use credit to take advantage of credit card loyalty schemes 
    • 23 per cent confirmed they will use credit for a planned event - highlighting that this group will manage their finances responsibly and will factor in when borrowing may be needed.
  • 49 per cent of ‘Enterprising Mainstream’ also chose a credit card and of this group: 
    • 40 per cent would pay off the account in full each month 
    • Rather than choosing credit for loyalty schemes, 40 per cent said they would plan to use credit for a special occasion, showing that this group is using credit to manage their finances

When asked, ‘If you were planning to take out a new credit card which factors would appeal to you most’?  

  • 59 per cent of ‘Prosperous Professional said rewards & cash back – reinforcing that this group intend to manage finances and utilise credit for their benefit.  
  • Only 21 per cent of the Group ‘Family Values said rewards and cash back confirming, they are more likely to be influenced by an attractive low APR (35 per cent)

Interestingly 23 per cent of the group ‘Family Value’ confirmed they are taking control of finances and using credit for debt consolidation, whereas 38 per cent of those in the ‘Business Elite’ group use credit for day-to-day additional spending – this shows that even though consumers are taking a different approach to lending some are still turning to credit to help top up their finances.

Will Lowe, Managing Director, Marketing Solutions at Callcredit commented: "Consumer spending has fluctuated over the years, which has been mainly down to the economic climate influencing consumer’s attitude to credit.  Previously some consumers have turned to credit to help cover the cost of living but our research highlights how this has been less common. Some are still turning to credit for this need but many are now taking credit at all, or managing their credit needs more carefully.

"Clearly understanding this change in attitude is important if marketers want to provide consumers with the right deals for their needs and tailor their products accordingly.  The results highlight the need for marketers to develop a clearer understanding of each consumer if they want to be relevant and helpful with the products and services they provide."

*All figures, unless otherwise stated, are from YouGov Plc.  Total sample size was 1,550 adults. Fieldwork was undertaken between 29th - 30th January 2015.  The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).

**Callcredit research finds 50% increase in those over 35 taking out credit to cover household bills (fast.MAP)
Cost of living pushes more women to apply for credit to make ends meet warns Callcredit

 YouGov credit graph 2YouGov - credit graph1