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Over two thirds of us are ‘Credit Rate Clueless’: new survey shows what Brits really know when it comes to having a credit card. 

It is that little bit of plastic that has saved us on many occasions. And spending big on a credit card has become the norm for many. With banks tightening their grip on loans, it has become much easier to acquire a tidy lump of money through a few clicks online. From new kitchens, exotic holidays, or even a brand new car, many people are putting their purchases on credit cards. Sometimes you might even use it to get cash out, or pay off other debts, depending on how your finances are fixed. But actually, you might be surprised to find out that many of us are using our credit cards all wrong! 

Credit report and score website MyCreditMonitor ( surveyed 1,500 people to find out how they use their credit cards and the results showed that 63% of the population are not using them in the right way! Even bigger is the amount of people: 67% of the respondents indicate that they have no idea what the interest rate on their current credit card(s) is – which, if not paid off in full every month, could work out to be extremely expensive. Darren Pickersgill, an Independent Financial Adviser ( told MyCreditMonitor what the right and wrong ways to use a credit card are.

From the various ways in which consumers can use credit cards, the survey found that most of the respondents were using theirs incorrectly unbeknownst to them.” Here is what the survey has found along with Darren’s tips to help you manage your credit card(s) correctly.

The Wrong Way

27% of the respondents use a credit card to make big purchases (like a kitchen or a wedding, instead of getting a loan):

Darren’s tip: “Using a credit card for expensive purchases like this is probably not the best idea. To start with, the high interest rate on most cards (excluding offers) means the debt could cost you more and take longer to pay off than other forms of borrowing (like loans, finance etc.) Also, such a large purchase could use up a high percentage of your available credit, which may mean your credit utilisation percentage becomes more significant.”

12% of us use credit cards to withdraw cash.

Darren’s Tip: “Using your credit card to withdraw cash can attract a higher rate of interest than using your card for purchases. On top of that, you are often charged a fee for a cash advance and the interest is usually charged from when you withdraw the cash – so you don’t get the normal 45-60 day interest-free period that you would get for making purchases using your credit card. Also, all of the above will typically apply to cash withdrawals with your card, transferring cash from your card to a bank account, purchasing travellers’ cheques or foreign currency, and using your credit card for gambling or betting (a bad idea for other reasons) could all be classed as cash advances.”

11% of us only make the minimum payment.

Darren’s tip: “This can mean that your debt takes a lot longer to pay off and will end up costing you a lot more, as you will typically be paying interest on the interest each month. Even if you can’t pay off the full amount due each month, paying as much as possible may help to significantly reduce the amount of time it takes to pay off the debt, and how much it could cost you.”

9% of us use our credit card to pay off other debts.

Darren’s Tip: “Some people may be left with no choice but to pay off other debts with a credit card, but this should be avoided, if possible. The main reason being that credit card interest rates tend to be a lot higher than other forms of borrowing (like loans and overdrafts for example), so unless you can pay it off quickly, or you are taking advantage of a card with a balance transfer or a low-interest holiday loan offer, using your credit card will probably mean the original debt will end up costing you a lot more.”

4% use as much of their credit limit as possible.

Darren’s Tip: “This is where understanding credit utilisation becomes important, i.e. how much of your credit limit have you used up. The higher your credit utilisation percentage, the more likely lenders are likely to think that you ‘need’ to use all your available credit, and that you could have issues repaying your debt.”

The Right Way

Only 37% of Brits use their credit cards the ‘right’ way: for day to day expenses, then pay the total off each month.

Darren’s Tip: “Using your card this way has a number of benefits, depending on the card. First of all, you’ll probably be able to take advantage of a reasonable interest free period (typically 45-60) days, so if you pay your debt in full each month, it won’t cost you anything. Secondly, using a credit card for your purchase can provide you with a certain level of protection against issues of fraud (it’s not your money that gets taken it would be the credit card companies, who will take action to get it back), and you may benefit from other features such as extended warranty period and cashback bonuses.”

I think these results will surprise a lot of people,” says Sati Dhanjal, Vice President at MyCreditMonitor. “We traditionally think that we should keep our credit card for those ‘big’ purchases, rather than do smaller things like buy groceries, or travel tickets, which we would be more realistically able to pay off at the end of the month, avoiding huge fees. Hopefully, following Darren’s advice, people will think about adjusting their habits.”