Are you good with money?
04/06/2008
We all like to think that we’re good with money and a new survey from CreditExpert, the online credit monitoring and identity fraud protection service from Experian, shows that 96 per cent of us believe we’re up to speed on our current financial position.
No interest in interest
The survey shows:
• 66 per cent of credit cardholders could not tell you what rate of interest they are paying
• 56 per cent of men and 71 per cent of women with personal loans admit they had no idea of what APR they are being charged
• 29 per cent of those with personal loans can’t guess how much they have left to pay off
• 75 per cent of us with overdrafts don’t know what interest we’re paying, rising to 83 per cent among those aged 45-54 – and nor do 48 per cent of mortgage holders
• Nearly a quarter of mortgage holders don’t know how much of their home loan they still have to repay
But we know our limits
But at least nine in ten of us know what our overdraft limits are and 88 per cent of credit cardholders know their outstanding balance.
Overall, 15 per cent of people with loans can’t say with any accuracy how deep in debt they are. And one in ten of us don’t even know how much we earn after deductions.
It is little different with savings – 59 per cent of us with a savings account couldn’t tell you what interest we’re earning.
Loan fears
Given this lack of awareness, it is little wonder that many people believe they will be turned down for even relatively small loans:
• 15 per cent think they will be refused a £1,000 loan, a figure that rises to 21 per cent among 18-24-year-olds
• 28 per cent think they will be declined a £10,000 loan, including 52 per cent of 18-24-year-olds.
• At £30,000 – the size of a small mortgage – 41 per cent think they will be rejected, including 64 per cent of 18-24-year-olds
Not surprisingly, 29 per cent of us admit to planning our finances no more than every three months – or never at all. Yet just eight per cent say they’re poor at managing their finances.
Jim Hodgkins, managing director of CreditExpert and LowerMyBills.co.uk, says, “It’s clear that there’s a mismatch between perception and reality for many people when it comes to their finances. Some of us could be getting into financial hot water without realising it, while others may well be worrying unnecessarily about their ability to get a loan.
“One way to get a reality check is to look at your credit report. It will give you an idea of what you’ve borrowed, how much is outstanding and how well you’re managing repayments. It might even end up reassuring you and regular checks will help you to keep on top of your finances. That could make the difference between being turned down for credit or having to pay high interest and not getting the deals you want.”
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