Do you know your credit card's APR?
By UK CreditCards.com
Do you know how much you are paying in interest on your credit cards? If you don't, you're not alone. A recent survey has found that millions of Brits have no idea what rate of interest they are paying.
Over 50% of people didn't check interest rates
before applying for credit
According to the discount website MyVoucherCodes.co.uk, over half of Brits (52%) who borrowed money through credit cards, loans or overdrafts admitted they did not bother to find out what the interest rate was.
The research also found out that almost two thirds of people (65%) were then shocked when they found out how much interest they were being charged. A fifth of people (21%) admitted that they regretted borrowing the money after finding out how much they were paying in interest on their loans.
According to the survey, Brits were most likely to borrow through a credit card -- with 72% saying that was their primary use of credit. 43% said they had taken out a personal loan and 39% said they used their bank overdraft.
Borrowers urged to check interest rates on credit
"Interest rates and APR are something that any borrower should be fully aware of before signing up for anything," warned Mark Pearson, chairman of MyVoucherCodes.co.uk, in a press release. "Some interest rates and APR are set extortionately high and it's a shame that many people are tricked into a false sense of security."
This can also be true of 0% APR credit cards. Whilst these credit cards offer interest-free borrowing for a specific period, it is vital that you know what interest rate you will be charged once your interest-free period expires.
Similarly, if you have taken out a bad credit credit card it is essential that you shop around for the best interest rates, as rates tend to be higher on this type of borrowing than they are on standard credit cards.
Published: 18 May 2011
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