Three quarters of families struggle to make credit card payments

Three quarters (76%) of those with credit cards struggled to pay off their monthly balance in the past six months because of rising living costs. This includes 32% who struggled to repay their balance every month, according to Compare the Market’s latest Money Action Index.

More than half of those who struggled (54%) stated that it was due to the rising cost of everyday expenditure, such as food shopping and fuel.

The Index also showed that households with children at home are most likely to be struggling to manage their finances (55%), with most seeing their regular bills increase in the past six months.

More than eight in ten (85%) said that they’re paying more for energy, with 61% spending more on council tax and 44% have seen their car insurance premiums soar. Seven in ten (70%) are now worried about higher food prices in the next year and 66% worry about their winter energy bills.

This has led to three in ten households (30%) with children at home having to lend or be given money by their parents to help with bills in the past month, receiving £266 each on average.

Despite this concern, only 37% of these households have taken action to save money, which is an improvement on October’s Index figures, where 63% had not tried to improve their finances.

Of those households that have improved their finances, 69% cut back on spending, 62% used less energy to keep their bills down, and 59% shopped at cheaper supermarkets. More than four in ten (44%) reduce spending such as hobbies and holidays and 26% switched providers where they could for household bills.