The research which was carried out by credit rating agency, Equifax, showed that of the individuals who don’t pay off their whole credit card balance every month, one in three confessed they had no idea what the remaining balance was.
The survey painted a worrying picture of the UK’s finances, with four in ten of the 3000 adults questioned saying that they used their credit card to help pay for essential living costs. This figure tallies with research previously carried out by consumer watchdog, Which?, when around 20% of people said they bought food and basic household goods on their card.
The recent meltdown of NatWest has highlighted a lack of emergency funds in many households, with the majority of account holders having no other source of income when they were locked out of their wages. Interviewers found that over half of those who took part in the study had less than 10% of their money left in the week leading up to payday. One in ten said they had no money left whatsoever in the last few days of the month.
Fifteen percent of the participants said they regularly rely on scraps of money they find in coat pockets and at the bottom of bags, in order to survive the last few days in every month.
One in five credit card holders said they paid off either the minimum or less than a quarter of the outstanding balance every month. But over half admitted they had no idea how much interest they were being charged.
A spokesman for Equifax, Neil Munroe, described the ‘knife edge’ upon which many consumers are teetering and said that although inflation has fallen, the lack of income growth had severely hampered household budgets.