Nearly a third (31%) of credit cardholders have been unable to repay their balance in full each month since the pandemic began, which can lead to further interest and debt accruing due to high APR rates, according to new research from comparethemarket.com. Among 25-34-year-olds, this figure increases to more than two-fifths (41%).
Millennials are the hardest hit of any age group, with more than half (57%) of those aged between 25-34 struggling to meet monthly credit card repayments. A fifth (22%) say the pandemic has hit their finances, and 18% say the financial strain is a result of having to pay other household bills first.
It is not only the Millennial generation struggling; 40% of respondents across all age groups have struggled to meet repayments since the pandemic started, rising to almost half (49%) among 35 to 44-year-olds. Over the long term, more than a quarter (28%) worry about paying future bills.
Almost two-thirds (61%) believe that providers need to do more during this time to help those who are struggling to pay bills. However, the Financial Conduct Authority (FCA) deadline for applying for a payment holiday ended on the 31st March, we urge anyone struggling with repayments to get in touch with their credit card provider as soon as possible to ask for support. If all options have been exhausted with your credit card company please contact us for advice.
Missed credit card payments can have a huge impact on an individual’s financial future. A missed payment on a credit report can decrease an individual’s credit score and impact their ability to secure credit, including balance transfers, a mortgage, or a personal loan.
Since the pandemic began, less than a fifth (18%) have seen their credit score improve, while 12% who have applied for a new credit card in the last year have been declined.
For anyone struggling with payments. The advice is simple, ask for support from your credit card company as soon as possible.
