Consumers' money confidence fails to add up
Nearly nine out of 10 adults believe they are good at handling their personal finances – but a new study from credit card provider Capital One shows that their confidence does not always add up.
Despite 88% of people claiming to be on top of their money the research shows they are not entirely clear about their finances and could benefit from some simple positive steps to be more in control of their cash.
Capital One’s study shows half (50%) of credit card holders haven’t reviewed their monthly payments or balance in the past year. That rises to 82% for people with overdrafts and to 86% for customers with personal loans, the research shows.
The findings reveal that people are not taking proactive steps to ensure they stay on top of their money - 53% of consumers have never checked their credit rating, despite it being possible to do this for free.
And one in five (21%) are unaware that missing a credit repayment can harm their credit score with 25% believing that ignoring a County Court Judgment will not affect their ability to access credit.
To help consumers improve their financial management Capital One has launched its ‘Credit Made Clearer’ campaign, which features a series of short animated films offering practical financial educational advice.
Dr Roger Henderson, senior medical practitioner and stress expert, comments: “This is a classic manifestation of the ‘ostrich syndrome’, where people choose an out of sight, out of mind approach to their finances where the less you know, the less there is to worry about. Often people kid themselves they’re in good financial shape but in reality it’s a different story, which is only revealed when bigger problems occur further down the line.”
The ‘Credit Made Clearer’ films encourage consumers to visit the Capital One website where they can access additional myth-busting content, helpful money management tools and information about the rate-reducing Progress card, which rewards customers who manage their account sensibly by reducing their interest rate.
Capital One’s Progress card is aimed at consumers who have some history of managing credit but who may have missed payments in the past and as result may have struggled to secure lower interest credit in the current economic environment. The card is intended to give them the opportunity to automatically move to a more competitive rate and help them improve their credit score.
Commenting on the new campaign Brian Cole, Managing Director, Capital One said: “It is encouraging that consumers believe they are on top of their finances but perhaps they need more support in order to ensure they do not make avoidable mistakes. We hope that our approach, which combines animation and humour, will help more people to think about their finances and take simple positive steps to improve them.”
For more information, go to: capitalone.co.uk/creditmadeclearer