Borrowers blighted by interest rate ignorance

21/04/2011

Over half of people in debt don’t know how much interest they’re paying, according to research.

A survey conducted by discount website MyVoucherCodes.co.uk, found that 52 per cent of people who take out credit cards, loans or overdrafts do so without bothering to check the interest rate first.

Unsurprisingly, 32 per cent of the people in that group admitted they were in serious debt.

But 65 per cent said they were shocked when they found out how much interest they were being charged, while 21 per cent said they regretted borrowing the money.

People were most likely to borrow through a credit card at 72 per cent, while 43 per cent had taken out a loan and 39 per cent had gone overdrawn.

Eight out of ten people still owed money, with 32 per cent describing their debts as being serious.

Mark Pearson, chairman of MyVoucherCodes.co.uk, warned that those who are vulnerable to high charges can include people taking out small amounts

Mr Pearson said: "Interest rates and APR are something that any borrower should be fully aware of before signing up for anything.

He added: "Some interest rates and APR are set extortionately high and it's a shame that many people are tricked into a false sense of security."

MyVoucherCodes.co.uk surveyed 1,201 people during April.

Tags; Budgeting Advice, Debt Management and Banking, Income Worries and Debt, Current UK Economy, Credit Card Lifestyle,

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