Credit card holders fail to understand features sufficiently
New research shows that Brits are increasingly taking on financial products without understanding some of the essential features.
A growing number of consumers are comparing credit cards and other financial products, but failing to grasp what the features actually mean.
A massive 93% of people compare features of different products and a further 89% compare the level of features between the products. Despite this, nearly half (47%) don’t know what the product features mean.
compare credit cardsPrices are just one of the major comparisons that consumers make. However, there could be a huge variation in financial products such as the level and benefits that could be offered.
A poll by independent financial research company Defaqto highlighted that in the current economic climate it is important for consumers to carefully consider if the features and benefits meet their specific needs.
David Cartwright, Defaqto's Head of Insight, said: "Whether you are insuring your home or your car or buying a protection product for you and your family, it is essential that you take time to consider whether the features and benefits that you require are actually provided by the product you choose.
“There is such a wide variation in what's available that it's understandable that many consumers are sometimes confused by what's on offer.”
Credit cards are just one of the products on the market which consumers are failing to understand, along with current accounts, general insurance and investments.
The Annual Percentage Rate (APR) on credit cards might be one of the features that people frequently fail to comprehend fully. This is the rate that consumers typically pay to borrow money on a credit card, mortgage or loan. It’s not simply an interest rate as it takes into account a number of other factors including the bank or lender’s administration costs.
APR credit card rates are commonly applied to purchases, but not balance transfers or cash withdrawals.