Confused.com finds UK consumers waste £150million a year on credit card charges
Confused.com research has shown that whilst Government changes enforcing a positive order of repayments on credit cards are now saving consumers an estimated £500(Source: Guardian.co.uk, The Observer, 14th March 2010) a year, UK consumers are still collectively wasting £150 million per year on unnecessary late credit card payment charges.
The comparison website found that 57.5% of credit card customers donít have a direct debit set up to make the minimum repayment on their credit card each month, making them liable for a ílate paymentí charge from their provider if they forget to make a payment. Costing an average of £12 per time, these charges can soon stack up.
26% of credit card holders have been charged at least once in the last year for missing a minimum payment; a further 8.5% have been charged three or more times in the last 12 months, and 1.2% have been charged ten or more times in the last 12 months - thatís over £120 each in charges.
Chris Griffiths, head of credit cards at Confused.com, said: "Setting up a direct debit to make a minimum payment on a credit card is such a simple thing to do, yet well over half of credit card holders havenít done it. Collectively we are wasting millions of pounds each year on these charges. As well as late payment charges, many credit card holders are likely to have lost out on attractive low interest introductory deals or rewards as well, as these deals are often withdrawn if minimum payments arenít met. Missing minimum payments can also adversely affect customerís credit profiles, which may be detrimental when they want to borrow in the future.
ďWe would encourage anyone without a direct debit set up to get one in place. Not only will this save money on charges and help contribute to a healthy credit profile, it will allow money that would have been spent on charges to be used to repay more than the minimum amount, saving more money as interest charges are reduced.Ē
Notes to editors
Research carried out by One Poll, based on responses of 2,000 participants.
BBA figures November 2010 show 33,552,000 active credit card accounts in the UK.
Confused.com survey found 19,292,400 of these accounts (57.5%) donít have a direct debit in place. On average, each account has been charged a fee 0.65 times in the last 12 months, incurring an average fee of £12, creating £150.48 million in charges.
Confused.com is one of the UKís biggest and most popular price comparison services. Launched in 2002, it generates over one million quotes per month. It has expanded its range of comparison products over the last couple of years to include home insurance, travel insurance, pet insurance, van insurance, motorbike insurance, breakdown cover and energy, as well as financial services products including savings accounts, loans, mortgages and annuities.
Confused.com is not a supplier, insurance company or broker. It provides a free, objective and unbiased comparison service. Confused.comís service is based on the most up-to-date information provided by UK suppliers and industry regulators.
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