Credit Cards & Loans
Brits in denial over credit card debt finds Zopa
The average Brit has £4,500 of credit card debts, which could take as much as 17 years to pay off at an average interest rate of 17.9 per cent, according to Zopa.
A survey by the peer to peer lending group found Brits are in denial about their credit card debt. Two-thirds of credit cardholders pay interest on their balance each month, with one in five (20 per cent) choosing to pay only the minimum amount each month. Those choosing the minimum repayment option would take 17 years to pay off debt of £4,500 with the borrower paying back more than double the original debt.
Over half (55 per cent) of credit card holders in the UK don’t even know the interest rate on their credit card balance and many significantly underestimate how long it would take them to pay off their current debt. Less than 3 per cent of borrowers expect to be paying off their credit card for more than 16 years.
However, nearly two thirds (61 per cent) admit that their credit card debt is unmanageable and over a quarter (26 per cent) feel overwhelmed. One in five (20 per cent) claim they have trouble sleeping due to keeping up with credit card payments and one in six (18 per cent) admitted their credit card debt had caused arguments with friends and family.
Zopa has created a video to show credit card holders the long-term effect of their borrowing. Using prosthetics and make-up, credit card users have been made to look the age they will be when their current credit card debt has finally been cleared.
You can view the video here. www.zopa.com
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