For the past few years, many households and individuals have decided that using a credit card isn’t always the most sensible option when making a purchase. However, for quite some time, when shopping online, more people chose to pay with a credit card as opposed to a debit card, but according to a report, all that changed.
The UK Cards Association, which represents providers of debit and credit cards across the country, revealed that, for the first time, more money was being spent online using debit cards than credit cards. £35bn was spent using ordinary debit cards, compared to £34bn with credit cards. This is a surprising shift, but one that had been coming for some time.
One of the main problems that people associate with credit cards is the potential for surcharges being given by lenders. When going on an online shopping spree using one, the likelihood of being given a hefty surcharge tends to increase, which for the consumer can be an expense they could do without. This is helping to make spending with debit cards a little more alluring.
The OECD revealed that people in the UK were more likely than those in any other developed nation to spend money online, stating that two out of three adults had at least made one purchase. With the risks involving shopping online gradually ebbing away, it seems that more of us see ecommerce as a good idea, although spending with credit cards can be dangerous.
Consumers caught out
In the early days of ecommerce, many people had decided to make large purchases out of necessity with their credit cards as they didn’t have the funds from their current accounts or regular savings accounts to cover the cost. While credit cards offer convenience when shopping online, the prospect of being forced to pay a surcharge for big transaction has seen the shine come off them.
A spokesman from Yorkshire Building Society explained why shopping online with a credit card isn’t all it might be cracked up to be:
If buying something online, then there’s a chance you have to pay extra for delivery, depending on the time you want to receive what you have purchased. This can make budgeting with either a debit or credit card a little more difficult when taking this into account, but with credit cards, going over your limit could be expensive.
One thing that helps to make credit cards remain attractive to many consumers is their usefulness in protecting them in the event that they want to return their goods for some reason. If they spend over £100 on an item, and the company goes under before they receive what they bought, they can claim their money back.
This is why many people still decide to use a credit card for big purchases. However, some protection is available when using certain credit cards, while not many people will spend over £100 on one item when online.