We 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.
Cardiff, UK (PRWEB) September 8, 2010
UK consumers are collectively wasting £150 million per year on unnecessary late credit card payment charges, reveals Confused.com. New research from the comparison website shows that 57.5% of credit card customers don't have a direct debit set up to make the minimum repayment on their credit card each month, making them liable for a 'late payment' charge from their provider if they forget to make a payment. Costing an average of £12 per time, these charges can soon stack up.
New research showed:
57.5% of credit card holders don't have a direct debit set up to pay off the minimum amount;
26% of credit card holders have been charged at least once in the last year for missing a minimum payment;
8.5% have been charged three or more times in the last 12 months;
1.2% have been charged ten or more times in the last 12 months - that's over £100 each in charges;
By age, 18-24 year olds are the best at setting up a direct debit, with 52% having one in place. They are however also the most likely group to miss a payment, with the average 18-24 year old being charged 0.83 times in the past 12 months;
The 55 plus age group is the least likely to have a direct debit set up, with 83% of people in this category relying on memory to get the minimum balance paid. This is also the group with the fewest charges in the last year, averaging just 0.34 times each.
Commenting on the findings, Alex Higgs, commercial analyst at Confused.com, said:
"Setting up a direct debit to make a minimum payment on credit cards is such a simple thing to do, yet well over half of credit card holders haven't done it. Collectively we are wasting millions of pounds each year on these charges, money which would be better spent elsewhere in these tough financial times. As well as late payment charges, many credit card holders are likely to have lost out on attractive introductory deals or low interest rate offers as well. These deals are often withdrawn if minimum payments aren't met, meaning more money is wasted as they are reverted onto higher rate deals. Missing minimum payments can also adversely affect customers' credit profiles, which may be detrimental when they want to borrow in the future.
"We 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."
For further information please contact the confused.com press office:
Notes to editors
Research is based on responses of 2,000 participants
Based on BBA figures from May 2010, there are 33,465,075 active credit card accounts in the UK. Based on the Confused survey, 19,242,418 of these accounts (57.5%) don't 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 million in charges.
Confused.com is one of the UK's 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 and car insurance, motorbike insurance, breakdown cover and energy, as well as financial services products including credit cards, loans, mortgages and life insurance.
Confused.com is not a supplier, insurance company or broker. It provides a free, objective and unbiased comparison service. By using cutting-edge technology, it has developed a series of intelligent web-based solutions that evaluate a number of risk factors to help customers with their decision-making, subsequently finding them great deals on a wide-range of insurance products, financial services, utilities and more. Confused.com's service is based on the most up-to-date information provided by UK suppliers and industry regulators.
Confused.com is owned by the Admiral Group plc. Admiral listed on the London Stock Exchange in September 2004. Confused.com is regulated by the FSA.