More than half of credit card users are unsure of the interest rate they pay, according to new figures released by the Irish League of Credit Unions (ILCU).
Some 68 per cent of consumers surveyed by the ILCU in Northern Ireland said that they own a credit card, with 61 per cent of credit card users unaware of the interest rate they pay.
Of those who responded that they are familiar with the interest rate they pay, 21 per cent said they think they pay between 6 per cent and 10 per cent, 25 per cent think they pay between 18 per cent and 24 per cent, while 34 per cent of respondents said they pay less than 5 per cent interest.
According to the ILCU, the survey highlighted a major lack of understanding when it comes to how interest is applied. This was evident as 26 per cent of respondents incorrectly stated that they “don’t pay any interest” if they cover the minimum balance due at the end of each month.
Meanwhile, 57 per agreed that people in Northern Ireland rely too much on credit cards for making purchases. The pandemic was cited by 64 per cent of those surveyed as the reason why more people are now dependent on credit cards.
Commenting on the findings, ILCU head of communications, Paul Bailey said: “This survey highlights that consumer awareness around credit card interest and how that interest is applied is worryingly poor.
“With over two thirds of consumers in Northern Ireland owning credit cards, it is concerning that 61 per cent of these are unaware of the interest rate they pay.”
“With nearly half of respondents believing that credit card companies aren’t doing enough to clearly explain credit card terms and conditions to consumers, this is worrying given the high usage and over reliance on credit cards among the Northern Irish population.
“I would encourage the public to arm themselves with as much information as possible when it comes to financial products and services to make sure they are making the right financial decisions to suit their individual circumstances.
“At the credit union, we aim to provide members with the necessary financial education to support them in managing their financial wellbeing.”
