Majority of consumers in Northern Ireland unaware of their credit card interest rate level, and how

Posted on: 13 Jan 2023

ILCU survey on credit card spending finds consumers still lack understanding of how credit card interest is calculated

• More than two thirds of adults in Northern Ireland own a credit card, despite 43% being unaware of interest rates

• The main use of credit cards for 2023 will be for monthly ad-hoc purchases

• More than half agreeing that credit card companies do not do enough to explain interest to consumers

 
A national survey conducted by the Irish League of Credit Unions (ILCU) looking into the spending habits of credit card users in Northern Ireland has found that there is a worrying lack of awareness on the interest rates associated with their use. The survey collated responses from 500 people across Northern Ireland during December 2022.
 
The survey found 67% of adults in Northern Ireland own a credit card. More than half of those surveyed stated that they think adults in Northern Ireland are too reliant on credit cards to pay for goods. The main use of credit cards for 2023 will be for monthly ad-hoc purchases (43%). 15% will use credit cards to pay for future planned holidays.
 
Commenting on the findings, ILCU NI Manager, Martin Fisher said, “The high dependence on credit cards in Northern Ireland, paired with the lack of understanding on the charges and interest associated with their use is worrying. A significant cohort of those surveyed (31%) are making only the minimum repayments, with 13% frequently unable to make any repayment each month.”
 
Less than half of those surveyed (45%) will use their monthly income to clear their balance fully each month.
 
The most concerning trend is the lack of awareness when it comes to interest on their credit card accounts, and how it works. Of those who knew that they were paying interest, 27% think they pay 5% or less, while 9% believe they pay 30% or more each month.

Martin Fisher continued “Credit card companies have a duty to make sure that their customers understand the product they are offering. I would encourage all members of the public to do some research before applying for a credit card, and make sure that they are aware of the charges associated with a credit card account.
 
43% of adults in Northern Ireland do not understand how credit card interest works at all. Over half agree that credit card companies do not do enough to explain interest to account holders.
 
Mr. Fisher concluded “Credit unions make every effort to put a focus on financial education, ensuring that our members have the tools needed to make positive choices that protect their financial well-being. Credit unions can offer small loans and supports to our members for purchases like a car, home improvements or other necessary goods and services.”


This study was commissioned by the Irish League of Credit Unions (ILCU), and carried out by independent research company, iReach Insights, in December 2022. 500 adults in Northern Ireland responded to the online survey.