Self-control biggest concern over credit cards
Controlling spending temptations and unintentionally falling into debt are consumers’ main concerns when it comes to owning a credit card, according to Equifax.
Four in 10 (40 per cent) of people were worried about getting into debt if they used a credit card, according to the credit reference agency’s online survey of more than 2,000 people.
On the plus side, the survey showed positive awareness about the potential benefits of spending on credit cards, including covering emergency expenses (42 per cent), having purchase protection (40 per cent) and spreading the costs of large purchases (27 per cent).
The survey, conducted by YouGov, also revealed a greater understanding of the relationship between credit cards and credit scores among younger people.
Nearly four in 10 18 to 24-year-olds (38 per cent) and 44 per cent of 25 to 34-year-olds believe a credit card can help build their credit score, compared to just 21 per cent of 45 to 54-year-olds and 15 per cent of over-55s. There is also greater mindfulness among the younger age groups that missing payments can harm their credit score.
Robert McKechnie, head of products at Equifax, said: “When it comes to credit, it’s clear many people lack confidence in being able to manage their own spending. But, if spending is managed properly and balances are repaid in full each month, credit cards can be a useful addition to your wallet. Self-control shouldn’t prevent people from taking credit, but both consumers and lenders have a part to play in ensuring the experience remains positive.”
“Younger people’s growing understanding of credit scores and the impact of regular payments on scores is a positive development. A responsible approach to day-to-day finances and repayments can pay dividends when it comes to larger financial milestones, such as applying for a mortgage or car finance. Taking steps to improve your risk profile has long-term benefits, so it’s good to see people starting earlier in life.”