Four in ten using credit cards to pay for essentials

Of this, 57% of those aged 18-34 have needed to use their credit cards for essential bills, compared with 46% aged 35-44, 38% aged 45-54 and 21% of people aged 55 and above. Additionally, 42% of women have done this compared to 35% of men. 

The polling also found that 40% of those earning up to £25,000 have turned to credit to purchase essentials, with this rising to 44% for those earning between £45,000 and £55,000. It also suggests that close to two thirds of people are worried about the current state of their personal finances and ability to cover essential costs. 

In separate research, and come as part its latest spending report research, the building society found that essential went up by 12% year-on-year, and non-essential spending increased by nine percent.  

Broken down, all bar one essential spending category – car finance – saw annual growth, while only four out of the 15 non-essential spending categories recorded a year-on-year reduction – with this including dating, subscription services and home improvements.  

Looking at essential spending as whole, in total the amount spent during February reached nearly £3.97bn, with spending on utility bills and on supermarket bills going up – increasing by 34% and 14% year-on-year respectively.  

Annual credit card repayments also went up during the month, increasing by 19% in the amount spent on credit card repayments as people turn to spending on credit to finance both essential and non-essential purchases.  

Turning to non-essential spending, this hit a total of £2.75bn – with spending on holidays and travel in particular continuing to grow. Holiday spending went up by 19% and airline travel by 34% year on year. Spending on eating and drinking, meanwhile, both went up by 11% when compared to last year.  

Nationwide’s payments strategy and performance director Mark Nalder said: “We’re continuing to see annual growth in consumer spending and, while that can partly be put down to rising costs and inflation, we’re also recording year-on-year growth in the level of transactions made across both essential and non-essential spending.  

“This shows that despite rising costs, households are clearly looking to strike the balance between being fiscally responsible and still being able to spend money on themselves. However, our research shows that while the number of people worried about their finances has fallen slightly, there are people relying on credit as a way of bridging the gap for essential bills.”