Do you know what your credit card interest rate?
Credit report and score website MyCreditMonitor, which has surveyed over 1,000 people to find out how they use their credit cards, has found that 63 per cent of Brits aren’t using their credit card in the right way.
The main figure to take away from this is that a huge 67 per cent of people don’t even know what their credit interest rate is, this can be extremely expensive if not paid off every month.
A lot of people can tend to use their credit for big purchases, 27 per cent among the survey use theirs for this reason.
Darren Pickersgill, an Independent financial adviser told MyCreditMonitor what the right and wrong ways to use a credit card are.
He said: “Using a credit card for expensive purchases like this is probably not the best idea. To start with, the high interest rate on most cards (excluding offers) means the debt could cost you more and take longer to pay off than other forms of borrowing (like loans, finance etc.) Also, such a large purchase could use up a high percentage of your available credit, which may mean your credit utilisation percentage becomes more significant.”
Only 37 per cent of Brits manage to use their credit card in the right way, using it for day to day expenses and then pay it off each month.
”I think these results will surprise a lot of people,” says Sati Dhanjal, vice president at MyCreditMonitor. “We traditionally think that we should keep our credit card for those ‘big’ purchases, rather than do smaller things like buy groceries, or travel tickets, which we would be more realistically able to pay off at the end of the month, avoiding huge fees. Hopefully, following Darren’s advice, people will think about adjusting their habits.”