ZERO PER CENT CREDIT CARDS
'LEAD TO A WORRYING INCREASE IN PEOPLE'S LEVEL OF DEBT'
According to our latest research:
29% of people who took out best buy credit cards for spending or balance transfer ended up with more debt
41% of people who have taken out a zero per cent credit card for spending failed to clear the debt at the end of the period and 45% who took out cards to transfer balances failed to clear the debts.
Reasons they gave why they ended up with more debt:
• 28% said it was because their new credit card had a long interest free period which they felt ‘encouraged’ them to do this.
• Just over one in four (26%) said their credit card offered them access to new interest free credit which they used.
• 22% said the long period of not having to pay any interest meant they were not focused on repaying their debt .
Fairbanking Foundation says these issues contributed towards 21% of people claiming they have had debt problems over the past five years. The charity’s research has been welcomed by companies which have dropped so-called teaser rates.
One in three now own a financial product with a Fairbanking Mark
The Fairbanking Foundation grows Mark certification scheme encouraging organisations to improve financial well-being
Eight new providers approved as scheme expands to cover loans and credit cards
The eight new institutions this year including Barclays, Halifax, Bank of Scotland and Capital One as well as four credit unions Enterprise, Central Liverpool, 1st Alliance Ayrshire and London Capital taking the total of financial products covered by the scheme to 25 and including loans and credit cards for the first time.
The Fairbanking Foundation
The Fairbanking Foundation believes that banking providers should act in the ‘common good’ - that they owe a duty of care to their customers and to the country as a whole. As water companies are obliged to provide a product that is healthy and good for their customers, so too should banks, building societies etc.
To help to achieve this, the Foundation has been set up, as a charity dedicated to encouraging and helping banking institutions to improve the financial well-being of their customers and thereby the UK public as a whole.
Our work is designed to provide well-researched, independent and insightful new input to encourage and assist in producing financial products that enable people to manage their money better:
• customer research to better understand what drives people’s financial
• assessment of banking products against this understanding, and publication of results
• the Fairbanking Mark certification scheme - to identify and spotlight the leading products available
and encourage competition between providers to offer the best products
• advisory services offered to financial institutions, industry associations and other bodies to encourage the development and improvement of banking products that are helpful to the customer