Press Release
MORE THAN 1 IN 3 CONSUMERS LET CREDIT CARD DEBTS PILE UP
New Equifax research identifies the increased cost of the recession on family budgets
London, 16th February 2010 - As research from a comparison website** reveals the dependence on credit cards by UK consumers, leading instant online credit information provider, Equifax, is warning of the serious cost this dependence could be having on family budgets.
In its latest research* of consumer attitudes to credit card payments, Equifax found that 35% of consumers are now only paying off up to 25% of their credit card debts each month, with a further 22% just making the minimum repayment. More than one in 5 said the level of debt they are now carrying has increased in the last year.
"These figures do illustrate the difficult balancing act that many individuals and families are having to cope with each month" confirmed Neil Munroe, External Affairs Director, Equifax. "32% of respondents said that they believe they are now more in debt than a year ago because of an increase in living expenses. And reducing repayments on credit cards appears to be one of the first tactics used to manage a dwindling family budget.
"I don't think consumers are naïve - they know that reducing payments on credit cards is going to cost them in the long-run. But it seems they don't feel they have much choice."
The survey of Equifax Personal Solutions customers, conducted at the beginning of 2010, also showed that 20% have lost income either through cutbacks in overtime, an enforced pay cut or reduction in working hours, or because they didn't get a bonus last year. And at the start of 2010, nearly a quarter of respondents said they had not had a pay rise so far this year, with 64% either not expecting one, or are unsure if they will get a pay increase. That appears to be putting increasing pressure on family budgets.
There is, however, some optimism for future finances, with more than a third of respondents to the Equifax survey saying they think their financial situation will get better in the next 6-9 months.
In the current climate, the key is for consumers to be as informed as possible in order to manage their finances. The Equifax Credit Report, with the facility to access credit information for the first 30 days free, gives consumers a valuable insight into their credit status. Accessible simply by logging onto www.equifax.co.uk it is designed to help individuals understand their credit file and see what lenders see to assess new credit applications. It also includes expert tips and advice to help consumers take the right steps to manage their finances and navigate through life's challenges.
If the customer does not cancel before the end of the 30 Day Free Trial, the service will continue at £6.99 per month, giving them unlimited online access to their credit information and weekly alerts on any changes to their credit file. It also includes an online dispute facility to help them correct any errors on their credit file simply and quickly.
ENDS
For further press information or interviews with Neil Munroe, please contact: Cecile Stearn, Margot Tomkinson, Jenny Staniforth or Wendy Harrison at HSL on 020 8977 9132 / Fax: 020 8977 5200 or Email: cecile@harrisonsadler.com
*Equifax surveyed 957 customers of its Personal Solutions services, at the end of January 2010.
**Moneysupermarket released its credit card research on 15th February 2010 - full details can be found here.