28 Jun 2019 One third of Brits (31%) have borrowed money from family and friends; yet more than half (53%) do not expect to pay the money back according to new research by Lloyds Bank. 

Part of Lloyds Bank’s ‘How Britain Lives’ study, the UK-wide analysis from YouGov of 2,018 adults also found that one in five (22%) are borrowing money from friends and family just to get by, using the cash to cover day-to-day living costs. 

Brits are most likely to borrow money from the Bank of Mum and Dad (25%); borrowing an average of £4,008. Meanwhile, one in 20 (5%) have borrowed from siblings and 4% from friends, with just 3% seeking financial support from grandparents. 

Almost half (46%) of those that borrow money say they feel guilty for doing so, as they hoped to provide for themselves, and nearly one in ten (8%) admitted that the borrowing of money has caused tension in their family. 

However, six in ten (61%) Brits say they are happy to lend money to family and friends, with just one in ten (8%) feeling annoyed about lending to loved ones. Those in the South West (67%), and the South East (66%) appear to be the most generous regions and are happiest to offer a loan in times of need. 

London is shown to be less likely to hand out the cash than the rest of the UK, with only half (50%) of Londoners happy to lend money to a family member. Londoners are also twice as likely to be annoyed about being asked for a loan (20%), compared to 8% across the UK. The East Midlands are far more relaxed about lending money, with no respondents saying it left them feeling annoyed.    

This comes against the backdrop of the Lloyds Bank M-word campaign to tackle the stigma of talking about money, which found that that people don’t talk about money with their loved ones. More than two fifths (44%) of people have avoided discussions about money and a quarter (25%) have lied to family and friends about their personal finances. 

Martin King, Head of Customer Support at Lloyds Bank said: “We feel much more comfortable lending than borrowing in Britain; with half of us feeling guilty when we do have to ask for a bit of extra help. It’s important to keep talking with our family and friends about money concerns, as it can help to have some support and hear another perspective. 

“We’ve recently created the Lloyds Bank M-word online hub to provide a series of tips to help people feel more confident in opening up about money worries.” 

STARTING CONVERSATIONS ABOUT MONEY WITH FRIENDS OR FAMILY  

Conversations about money can be difficult, especially when you are facing financial problems. Most of us don’t feel very comfortable talking about our finances with our loved ones, let alone asking them for help.  

The Lloyds Bank M-word online hub has a whole range of information to support opening up about money. Take a look at the steps below on how to start a conversation.  

Go over your finances and understand what you need help with – It is easy to sometimes feel so overwhelmed by your finances that you end up ignoring the situation altogether, so why not ask a family member to look through your finances with you?  

Gathering all the information you need will help you understand exactly what the situation is. Once you’ve established all the facts, working out a plan will be much easier. For example, if you are struggling to get a deposit together for a home, it will be easier to start the conversation if you know how much you’ll need to borrow.  

Be prepared to talk, but also be prepared to listen – Understand and acknowledge the other person’s point of view. It’s only by listening that you’ll be clear on what’s important to the other person and be able to make a plan together.  

If you are asking for financial support, it is understandable that the other person might have some questions and concerns. Clear and open communication will help ensure there are no disagreements further down the line. 

Feelings around money can be strong, but they don’t have to lead to arguments – It’s not unusual for families to argue about money. There can be a lot of intense feelings, but the important thing is to have a calm conversation about the issues. Start by telling them how you feel, rather than what you want.  

Turning to a friend or family member for help could also impact wider relationships, for example if other friends or family members see it as favoritism. If you’re borrowing from a parent, it might be a good idea to call a family meeting to discuss the terms openly.  

Make a plan together – Reach an agreement about what to do next and keep talking about it. Occasionally the relief of having talked about money is so overwhelming that people don’t mention it again and don’t really convert words into action.  

A written plan or agreement is always a good idea. Break down exactly what the plan is, including details like when you will start to pay them back and how you plan to make the payment. 

24 Jun 2019 New research from later life lending specialist, Hodge highlights the crucial role that the nation’s grandparents play in enabling parents to work.

For many, retirement is an opportunity to enjoy the luxury of free time, however new research from Hodge revealed that grandparents are giving up an average of 11.5 hours a week looking after their grandchildren saving parents £9,568 a year on childcare costs.

Grandparents who provide childcare are enabling parents to focus on their careers and career progression to better provide for their families.

In fact, more than half (53%) of grandparents believe that providing free childcare has allowed parents to return to full-time work, and one in three (32%) think that their children wouldn’t be able to afford formal childcare.

With the majority (87%) not receiving any financial compensation for their time, over 50’s could help fund their retirement by accessing the value tied up in their home with Hodge’s flexible later life lending options.

Grandparents and family members who provide care for children under the age of 12 should also check if they’re eligible for Specified Adult Childcare National Insurance credits.

Matt Burton, director of mortgages at Hodge said; “When we think about generous grandparents we usually think about extravagant Birthday and Christmas gifts, not their time.

“But, by selflessly giving up their hard-earned free time grandparents are helping new parents to return to work and saving them thousands of pounds a year in the process.

“While it’s natural to want to help children and grandchildren, it’s also important that retirees remember to make time for themselves to enjoy their retirement. Hodge offers a range of products that allow people to access the value locked up in their homes allowing them to live the retirement lifestyle they choose and help make their retirement work for them.”

19 Jun 2019 A new study from Sainsbury’s Bank reveals that renters are significantly less likely to have life insurance or critical illness cover, with just 26% of renters taking out a policy in comparison to 41% of homeowners.

In the past 10 years, the number of households renting privately with children has risen by almost 800,000 to nearly 1.6 million. Renters are being urged to consider what their partner or family would do if they unexpectedly needed to cover housing costs such as rent and factoring contributions and other monthly out goings if the unthinkable was to happen.

Despite being less likely to have life insurance or critical illness cover, 54% of renters  are more concerned than homeowners (48%) about the financial implications should they pass away before old age. Also 21% of renters living in private accommodation worry about this situation on a weekly basis compared to 16% of homeowners. 

The survey found the top reason renters do not have life insurance is they believe they don’t have enough equity or money to have a life insurance policy (29%), in comparison to homeowners (11%).

Main reasons renters don’t have life insurance % of UK adults
I don’t have enough equity/ money to need to have life insurance 29%
I haven’t got around to it yet 18%
I have no one who needs money in the event of me becoming ill or dying 14%
I’m too young to have life insurance 13%
There are no serious hereditary illnesses in my family 9%

Important life events are the top reasons people decide to financially protect themselves. Buying a house is the main reason people chose to purchase life insurance (34%), followed by other memorable life stages, such as having a child (17%) and getting married (12%). Unfortunate experiences, such as becoming ill (9%) also prompt people to take out a policy.

Karen Hogg, Head of Insurance at Sainsbury’s Bank said: “As more people are raising families in rented accommodation, we need to shift our thinking in terms of life and critical illness cover only being relevant for people with a mortgage. That’s just not the case. All people need to consider what protection their partner and children may need should anything happen to them, including how to cover rent, bills and household essentials.

“Our research found that people are more likely to worry about the financial implications of their passing rather than taking action to alleviate any concerns and protect themselves for the future. Taking out a life insurance policy can help give you peace of mind and ensures you have the financial protection in place.”

Sainsbury’s Bank offers five top tips on life insurance

  1. Ignore common misconceptions: A common assumption is that you have to be a certain age before you get life insurance. This is the reason preventing nearly one in 10 from taking out life insurance, but anyone with financial responsibilities should consider life insurance regardless of age.
  2. Renters must prepare: One in five (21%) renters worry every week about the financial implications of their passing. Instead of letting stress set in, it’s important to turn that worry into action, something as simple as looking into a life insurance policy can offer relief from financial concerns.
  3. Look at lifestyle choices: Small changes that can make improvements to your health and wellness, such as quitting smoking, may also result in cheaper life insurance premiums.
  4. Choose the right cover: It’s important to know the difference between life insurance and critical illness cover. Life insurance provides a lump sum payment upon passing during the policy term that can be left to loved ones. Critical illness cover can provide a cash sum if you are diagnosed with or undergo a medical procedure for a specified critical illness during the policy term, to help financially during your recovery. Both can help ensure that your family’s financial prosperity will be protected in a time of need.
  5. Check your calculations: Before buying a life insurance policy, calculate how much cover you will need. In just four easy steps, Sainsbury’s Bank Life Insurance provides a helpful Life Insurance calculator which can  help you discover the amount of life cover you need and calculate how much your monthly premiums could be.

19 Jun 2019 New research by credit experts TotallyMoney reveals Brits lost £640m on their holidays in Europe last year due to high transaction fees and poor exchange rates. The annual Financial Awareness Survey 2019 commissioned by TotallyMoney and carried out by OnePoll asked 2,000 UK adults about their spending habits before and during a holiday abroad.

  • £437m was lost on holidays in Europe in the past year due to poor exchange rates and fees when spending cash
  • A further £95 million was lost through using debit cards abroad, and over £7 million using pre-paid cards
  • Brits using their primary credit card as opposed to a travel credit card paid out over £100 million extra on fees and exchange rates
  • Only a small number of people (8%) use travel credit cards while abroad
  • Over £80 million could have been saved in the past year by avoiding expensive exchange rates at the airport
  • More than half (58%) don’t know you can avoid high fees by paying in the local currency

The survey highlighted over half of people (51%) use cash abroad. If everyone changed their exchanging habits, nearly €500m more could have been spent in Europe last year.

Brits using their debit, credit and pre-paid cards while holidaying in Europe last year paid an extra £103 million in fees and poor exchange rates.

For a lot of people, exchanging currency is based on convenience, rather than value. But, this decision is wasting millions of pounds.

Another error is exchanging cash at the airport. Changing money before arriving at the airport could save over £80 million. This works out as a staggering £55.25 per person.

TotallyMoney CEO, Alastair Douglas, believes planning could be the key to saving money on holiday. He said: “Summer holidays are a highlight for so many families, and lots of planning goes into creating the perfect trip. Unfortunately, lack of financial planning means people are losing money.

“Poor exchange rates at the airport and using the wrong card abroad mean people end up spending more money than they need to. Understanding the fees involved can help people have a bit more spending money in their pocket.

Douglas explains that using a travel credit card could be the best solution: “Cards with no overseas transaction fees are perfect. It also means you don’t have to carry loads of cash around with you. The TotallyMoney credit card eligibility checker can help you to find cards you’re likely to be accepted for before your holiday.”

Here are five tips to make your money go further on your holiday this summer.  

  1. Get a travel credit card

The TotallyMoney financial awareness survey 2019 found that just over a third of people (37%) are aware you don’t have to spend on your credit cards every month. This means a travel credit card can be saved for each holiday. Keep it with your passport and it’s ready every time you travel.

The best travel credit cards charge no transaction fees while abroad. But, even with a poor credit history, you may be eligible for cards with a low overseas transaction fee. This will be cheaper than using your debit card while away.  TotallyMoney’s free eligibility checker lets you see what cards you are likely to be accepted for before you apply.

  1. Find the best currency exchange rate at a specialist travel bureau

Airports are known for their lousy exchange rates. They know it’s the last chance for people to change money before jetting off. This Summer, visit a specialist travel bureau to change your cash. These places often offer the best rate on the market and can make your cash go further while away.

  1. Always pay in the local currency — you will receive the best rate

Dynamic Currency Conversion (DCC) — being able to withdraw or pay using your own currency abroad — gives a poor exchange rate. Yet, over half of people (58%) are unaware of this and opt for the familiarity of Stirling.  

Unsuspecting tourists may find lenders and retailers favour this type of transaction as they get more money.

Alarmingly, 16% of those surveyed opted to pay in Pounds, while 17% claim they never had the option of choosing the local currency.

When given the choice of currency by retailers and restaurants, always choose local currency.

  1. Check how much your bank or lender charges for transactions abroad

Many of the fees charged on credit and debit cards abroad are extremely high. Despite this, over one in ten (13%) use their primary credit card for most of their payments on holiday.

Before jetting off, check with your lender how much it will charge for overseas transactions. If the fee is high, it’s worth finding an alternative option — such as a travel credit card.

  1. Check how much your bank or lender charges for withdrawal fees abroad

Not to be confused with transaction fees, withdrawal fees occur when using a credit card at an ATM. This charge will occur both in the UK and abroad.

But, certain cards may charge ATM withdrawal fees, plus fees for withdrawing abroad — meaning you pay even more for withdrawing cash overseas.

If you like paying in cash while on holiday, make sure to bring enough to spend and exchange it at a competitive price before arriving at the airport.

18 Jun 2019 Depending on where they live in the country, retired households can pay as much as 51% more for their annual council tax bill, new analysis* from UK’s leading independent equity release adviser Key shows.

Council Tax Eats Up a Fifth of State Pension Income:

The average council tax bill currently stands at £1,705 a year or a fifth of the State Pension of £8,767. For a single person – even after the 25% council tax discount – their bill of £1,279 would eat up 14.5% of the State Pension.  The highest average annual council tax bills based on a Band D council tax is charged in the North East at £1,884 while retired households in Scotland pay an average of £1,243, its study found. There are additional council tax exemptions available which include exemptions for people with Alzheimer’s, Parkinson’s and Dementia.

Over-65s face Council Tax Bill of £11.5 Billion:

The total paid by over-65s households in council tax a year is around £11.447 billion – around 28% of the total council tax paid this year. For a couple on the average over-65 income, council tax accounts for 3% of their total income while a single person would spend around 4.6%.

The amount of council tax varies widely with Band H properties in Adur and Worthing Council paying around £3,818 a year (14% of average household income) and those in the London Borough of Westminster Band A properties paying just £502.  Even in Band H council tax bills are £1,507 and £1,588 respectively.

Average council tax bills in England have increased this year by 4.7% with the highest increase in England and Wales introduced by Pembrokeshire County Council at nearly 10%. The lowest is in Thurrock at 1.7% while households in the former local authority of Christchurch – which has become Bournemouth, Christchurch and Poole – have had a 5.3% cut. Scottish councils have raised rates by between 3% and 4.79%.

Will Hale, CEO at Key said: “Council tax can be a major cost in retirement – especially for the many pensioners who we know are cash poor even if asset rich.  Just because you live in a nice area doesn’t mean that you can necessarily afford £1,705 out of your annual income with increases resulting in many needing to make cutbacks or prioritise it above other spending.

“While most people simply pay their council tax without complaint, it is easy to understand why they might be frustrated if their neighbour is paying substantially less just because they happen to be in a different post code.  The pressure is perhaps felt most acutely by those who are single and relying on the State Pension alone as then even after discounts around 14% of their income will go on paying for council tax.

“Homeowners who are struggling to meet these and other bills are actually in a relatively fortunate position in that they do have a potential solution on hand.  Over-65s own more than £1 trillion in unmortgaged property and we find that 11% of our customers are using this asset to meet day to day costs. 

“If your home is your largest asset it makes sense to assess what role property wealth can play in retirement planning. Good advice is key to making the right choice for your circumstances.”

The table below shows the picture around the country.

REGION NUMBER OF OVER-65 COUPLES AVERAGE COUPLES COUNCIL TAX BILL NUMBER OF OVER-65s SINGLES AVERAGE SINGLES COUNCIL TAX BILL
North East 172,186 £1,884 163,271 £1,413
South West 403,936 £1,846 383,064 £1,385
East Midlands 303,803 £1,836 288,105 £1,377
South East 580,138 £1,814 550,162 £1,361
North West 448,378 £1,807 425,211 £1,355
East Anglia 401,722 £1,780 380,965 £1,335
Yorkshire & Humberside 335,598 £1,746 318,257 £1,310
West Midlands 359,933 £1,732 341,335 £1,299
Wales 215,253 £1,591 204,131 £1,193
London 346,340 £1,476 328,444 £1,107
Scotland 338,786 £1,243 321,281 £932
GREAT BRITAIN 3,906,052 £1,705 3,704.226 £1,279

14 Jun 2019 More than 5 million Brits (10%) have fallen victim to a financial scam at some point in their lives, according to new research by Lloyds Bank and YouGov.

A quarter (25%) of the 2,018 UK adults surveyed also reported knowing someone else who has been duped by a fraudster.

Despite this, four in five (83%) say they feel confident that they would be able to spot a financial scam, and three quarters (77%) believe they are able to keep up with the potential risks around financial scams.

A third (33%) of clued-up Brits reported that they have been targeted by fraudsters but were able to put a stop to it.

The research, commissioned as part of Lloyds Bank’s How Britain Lives series to coincide with Scam Awareness 2019, also found that fake emails (36%) and dodgy phone calls (35%) are the most common ways for fraudsters to target their victims.

However, social media, company websites and even text messages were also found to be a hunting ground for scammers, with one in 20 (5%) people reporting being targeted in each of these ways.

Paul Davis Fraud and Financial Crime Director at Lloyds Bank said: “We are a vigilant nation, yet it is clear from our research that many of us do still get caught out when it comes to scams. Fraudsters have adapted to changing technology by using ever more sophisticated tactics, making them more difficult to spot.

“We’re encouraging people to talk to friends and family about fraud, so that more people are aware of how to identify the tell-tale the signs of a scam. If you suspect you’ve been a target, it’s important to contact your bank immediately.”

Scams Awareness 2019 runs from the 10th to 23rd June. More information can be found here.

How to spot a financial scam

By Paul Davis, Fraud and Financial Crime Director at Lloyds Bank

Fraudsters may try to get money from you by sending fake emails and texts or even calling you directly. They do this by sending an email or text to you in an attempt to get access to your internet banking details.

There are a few things you can do to help stop these types of fraud from happening:

  • Check for spelling mistakes – Get into the habit of checking for minor spelling mistakes in the addresses of the emails you receive. For example: “Lloids Bank” instead of “Lloyds Bank”. 
  • Double check the sender is real – If you receive an email asking you to make an urgent payment, always double check the request is real by speaking to them in person, or by calling them on the number you have saved.
  • Beware of unexpected emails – Be cautious about opening any emails that you weren’t expecting (even if you think you recognise the sender), and don’t click on any links or attachments unless you are sure they are genuine.Also, watch out for spoof text messages which may look similar to genuine messages you receive from your bank.
  • Use anti-virus software and stay up to date – Always use anti-virus software to protect your devices and ensure you have downloaded the latest updates for your operating system.
  • Question any requests to share details or move money – Your bank will never ask you to share your account details like user ID, password and memorable information. You should also be alert if your bank suddenly tells you to move your money or asks you to transfer funds to a new sort code and account number. Contact them immediately if you receive any requests of this nature.
  • Make sure your internet banking site looks normal – Do not log on or key in codes from your card and reader if any of the website pages look strange or different as this may indicate a virus infection.

11 Jun 2019 How rich are your parents? Do you know how much they REALLY own and what have they earned and saved throughout their working life? It’s a topic of contention that’s rarely discussed between families, but now may be the time to get the conversation going, as over 30 million Brits do not have a will and one trillion is set to pass from generation to generation in the next decade. Nationally representative research by will-writing service Farewill has found that 29% of parents want to talk to their children, and 31% of Brits want to speak to their parents about death, but have avoided the topic as to not cause upset. This is despite the fact that 24% of next of kin mismanage a loved one’s estate upon their passing, due to lack of clarity.

Key national research statistics:

42% of Brits do not know the full value of their parents’ estate, so are not confident that they will be able to manage their estate once they die
24% of Brits did not manage the estate of a loved one according to their wishes because they did not discuss it before their death
31% of the UK population want to talk to their parents about death and the management of their estate, but haven’t broached the subject because they think it will upset them
29% of Brits state that they want to talk to their children about their death and estate, but haven’t broached the subject because they think it will upset them
50% of the UK population believe that death is the hardest topic to discuss with family, more so than money, divorce or family disputes
34% of Brits say the topic of their estate and the process after their death is only mentioned in jest with my family and friends
38% of the UK state that managing a parents’ estate after their passing is the biggest responsibility in life
30% of the population have never discussed death with their parents/family

However, despite the emotive premise behind why it’s important to acknowledge the topic of death, what this ultimately boils down to is lost assets – £15 billion lies in dormant financial legacies across the nation, with a further £40 million passed to the crown from 2015. As a significant percentage of this figure belongs to deceased individuals, it is vital that families start discussing death and what they want to happen with their estate upon their passing; BEFORE their passing.

Farewill – Trustpilot’s no.1 will writing service asks the nation to discuss the one event in our lifetime that will bear the most significant financial impact. Powered by national research that deconstructs how the nation perceives the topic and its impact on our loved ones, this timely piece highlights the importance of normalising death and the financial implications when the deceased does not possess a will.

Dan Garrett, CEO and co-founder of Farewill is of the opinion:
‘A staggering £1 trillion expected to pass between generations over the next decade. Yet for so many the topic of our deaths and what we want upon our passing is one of the, if not the most neglected conversation. This research shines a light on how important it is to de-stigmatise the topic of death and normalise the discussion around the family table.’

05 Jun 2019 Cremation fees across the UK have risen by an average of 21% over a four year period compared with general inflation over the same period of just 6.3% according to Royal London.

Analysis of data, gathered from 267 locations in the UK over a four year period, shows cremation fees in Inverness, Scotland, saw the largest increase (56%) from £580 in 2014 to £904 in 2018. Bath in South West England had the second highest increase with cremation fees going up from £630 to £915, which is a rise of 45%. Eight of the 10 locations with the highest increase in cremation fees were public crematoriums, which reflects the budget pressures that local council are facing.

While almost all of the crematoriums increased their fees, Manchester North was the only location which saw a decline in fees, with the cost decreasing by 6% (£715 in 2014 to £674 in 2018). Glasgow North maintained their fees at £625 over the four years.

South West England was the region that saw the highest increase, with the average cremation fee rising by 24% over four years (£691 to £855), followed by the East of England which saw fees increasing by 23% (£686 to £843). In 2018 the South West and East of England regions also had the highest average cremation fees in the UK, with fees averaging £855 and £843 respectively. Northern Ireland had the lowest fees in 2018 at £380, with prices increasing by 9% over a four year period (£350 in 2014).

The latest Royal London National Funeral Cost Index shows that eight in 10 (79%) funerals were cremation funerals. Data gathered from the 289 crematorium locations across the UK reveals that all of the top 10 locations with the highest cremation fees in 2018 were by private crematoria.  The highest cremation fee was £1,070, which was charged by nine of the top 10 locations all of which are private crematoriums: Beckenham; Chichester; Northampton; Dundee; Nuneaton; Moray; Oxford; Leatherhead; and Crawley. Belfast in Northern Ireland had the lowest cremation fees at £380.

Commenting on the research Louise Eaton-Terry, funeral expert at Royal London, said:

“While private crematoria continue to have the highest cremation fees, we have seen public crematoria introducing much greater price increases. Local authorities raising burial and cremation fees is one of the factors contributing to high funeral costs. As councils continue to be squeezed by central Government budget cuts, increasing fees is a way to raise revenue and plug the shortfall in funding. But the rise in fees is also making funerals unaffordable and forcing bereaved families into debt.”

03 Jun 2019 What’s the cheapest way to borrow? What do lenders think about me? How many cards should I have? Just some of the questions that people have when thinking about credit cards. And, as recent findings suggest, questions that not many people know the correct answer to.

A 2019 OnePoll survey of 2,000 people, commissioned by credit experts TotallyMoney, reveals that alarmingly over half of people didn’t think a higher credit score meant better credit deals.

Just one shocking statistic uncovered by TotallyMoney’s poll — but it doesn’t stop there. Only 49% knew having a credit card would affect your credit rating, and less than one fifth understood the company you bank with isn’t more likely to accept your credit card application.

Over time, such financial fables have been compounded, instead of alleviated — causing confusion for consumers nationwide.

Alastair Douglas, CEO of TotallyMoney said: “Among credit card veterans and novices alike, there still exists many misconceptions which could be holding them back.

“Rumours and stories have spread over the years — and stuck. At TotallyMoney, we break down what is good and what is bad about each card, so our customers know exactly what they’re getting.

“Understanding what’s best for your needs is the first step to building a better financial future. As a TotallyMoney customer, you’ll get alerts and updates about the latest credit products and offers tailored to your credit rating — so you’re always in the know.

“But, there’s still some confusion out there. So, we’ve debunked some of the most common credit card fictions to help set the record straight.”

Fact is Stronger Than Fiction

Myth 1. I’m more likely to be accepted for a credit card from the bank I’m with

Why people believe it: If your bank already knows you, they trust you enough to give you a credit card.

The facts: This isn’t considered when the bank processes your application. Sometimes, your current bank will limit the perks available to you, as you’re already a customer. Another provider may offer you a greater range of perks to encourage you to become their customer.

The findings: Less than one in five people (19%) of people know that your current bank isn’t more likely to give you a credit card.

Myth 2. If I have a card, I should spend something on it each month.

Why people believe it: If you don’t use your card, there’s surely no point having it, so the lender will take it away.

The facts: If you’ve got a card, it’s absolutely fine to use it as sparingly as you’d like — but be sure not to use over 25% of your available credit, as this can lower your credit score.

The findings: Over a third (37%) of those surveyed knew that you don’t have to spend something on each of your credit cards every month.

Myth 3. If I don’t use a credit card, I should cancel it.

Why people believe it: Why keep a card that you don’t use?

Fact: Closing a credit account reduces the amount of credit available to you. So, depending on how much you’ve used across your other cards, could increase your overall credit utilisation. Using over 25% of your available credit is not looked upon favourably by lenders, so your credit score will decrease if you do.

The findings: Less than one in five people (16%) knew that you shouldn’t necessarily cancel the credit cards you no longer use.

Myth 4. Getting a credit card won’t harm my credit rating.

Why people believe it: There’s no harm in simply having a credit card. It’s how you use it that matters.

The facts: If you’re accepted for a card, your credit score will drop temporarily. Use your credit sensibly, and you’ll start to see your credit score increase. However, being rejected for credit may harm your chances of acceptance in the future, and if you keep applying and keep being rejected, the situation will only get worse.

The findings: Less than half of people (49%) know that getting a credit card will harm your credit rating.

Myth 5. When looking for a new card, the most important thing to consider is the APR.

Why people believe it: High APRs mean you’ll pay more interest, which you want to avoid.

The facts: There are a lot more important things to look at when considering a card. For example, a purchase offer gives you a period of interest-free spending, and there may also be fees attached to a card. And, if you make sure to pay your balance off at the end of the month, you won’t pay any interest at all.

The findings: Nearly one in two (49%) think that APR is the most important thing when they apply for a credit card.

Myth 6. I won’t build any interest if I make my minimum payments.

Why people believe it: If you’re still paying the bank back something, that’s enough to avoid interest.

The facts: Unless there’s an interest-free period, the only way to avoid paying interest is to pay off your balance every month — in full.

The findings: Almost half of those surveyed (46%) didn’t know that making the minimum payment each month still incurs interest.

Myth 7. A balance transfer won’t help me save.

Why people believe it: It’s all about paying your balance off and not building any debts — not moving your money.

The facts: Balance transfers could help you save money. They allow you to move a balance from one card, with a higher APR, to another card that usually has an interest-free period. This means you can pay off a balance over a longer period of time. 

The findings: Only just over one third of people (39%) of people are aware that a balance transfer card could be an easy way to save money.

Myth 8. I only want one credit card. Having too many will damage my credit score.

Why people believe it: Lenders only want you to have one card — their card. If you’ve got multiple cards, lenders will think you can’t be trusted to make your repayments across all of them.

The facts: Lenders are more concerned about whether you make your repayments. If you make your repayments every month across all your cards, there shouldn’t be any negative effect to your credit score.

The findings: Only a third of respondents (31%) know that having two or more cards isn’t necessarily bad for your credit score. 

Myth 9. My credit score doesn’t affect the credit deals and offers I can get.

Why people believe it: Your credit score doesn’t mean much. Banks don’t really look at it.

The facts: Your credit score is a representation of how favourably lenders view you. The higher the score, the greater the trust. The more they trust you, the better the rates you’re likely to get.

The findings: Staggeringly, more than one in two people (54%) don’t think that a higher credit score will impact the deals and offers you can get.

Myth 10. Maxing out my credit card is fine. They gave me a credit limit, so why not use it?

Why people believe it: The bank has given you a certain amount of credit. There’s no problem in using it all, otherwise they wouldn’t have set me this credit limit.

The facts: Going over 25% of your credit limit across all your cards can lower your credit score. If you spend too much, lenders could think you’re at risk of maxing out. This suggests to lenders that you’re struggling and having to resort to credit for day-to-day living, and risk building up a balance you can’t pay off.

The findings Only around one in three (23%) knew that keeping your balance below 25% of your credit limit is good for your credit score