Business

Survey exposes 'worrying' lack of understanding of credit card interest rates in Northern Ireland

Ryan McAleer

Ryan McAleer

Ryan is a business reporter at The Irish News. He has been on the business beat since 2018, initially working as the Belfast Telegraph’s business correspondent before moving to the Irish News in September 2019. He spent eight years before that as a news reporter in Co Tyrone, where he still lives.

According to a new survey, 43 per cent of adults in Northern Ireland do not understand how credit card interest works at all.
According to a new survey, 43 per cent of adults in Northern Ireland do not understand how credit card interest works at all. According to a new survey, 43 per cent of adults in Northern Ireland do not understand how credit card interest works at all.

A SIGNIFICANT number of adults in Northern Ireland have no understanding of how credit card interest works, a new survey has shown.

The new study, commissioned by the Irish League of Credit Unions (ILCU), suggests more than two thirds (67 per cent) of adults here own a credit card.

But the research, based on the responses of 500 people, reveal 43 per cent are completely clueless about the level of interest attached to their cards.

The survey, which was carried out during December 2022, showed 27 per cent believe they pay 5 per cent or less in terms of interest, while 9 per cent believe they pay 30 per cent or more each month.

The latest UK-wide market analysis by Moneyfacts, shows the average annual percentage rate for credit cards currently stands at just over 30 per cent.


ICLU manager in Northern Ireland, Martin Fisher, said given the high dependence on credit cards here, the lack of understanding around charges and interest was “worrying”.

Some 43 per cent of respondents said they will use their credit card for monthly ad-hoc purchases during 2023.

Around 15 per cent said they use cards to pay for future planned holidays.

Less than half of those surveyed (45 per cent) will use their monthly income to clear their balance fully each month.

“A significant cohort of those surveyed (31 per cent) are making only the minimum repayments, with 13 per cent frequently unable to make any repayment each month,” said Mr Fisher.

“Credit card companies have a duty to make sure that their customers understand the product they are offering.

“I would encourage all members of the public to do some research before applying for a credit card, and make sure that they are aware of the charges associated with a credit card account.

Mr Fisher said credit unions have traditionally placed a focus on financial education. The ICLU is currently affiliated with around 300 credit unions spread throughout the island, north and south.

“Credit unions can offer small loans and supports to our members for purchases like a car, home improvements or other necessary goods and services," he added.