Credit card confusion causing credit score harm

The results of TotallyMoney’s Financial Awareness Survey has revealed that myths surrounding interest payments, credit limits and how often you need to use your card are clouding the judgement of UK consumers.

One statistic shows that over half of UK adults (54%) didn’t know that paying off an outstanding balance in full each month may be good for their credit rating. Equally concerning is that almost two-fifths of people (37%) wrongly believe that by making minimum monthly repayments, interest is waived.

Surprisingly, the presence of these finance industry misconceptions and half-truths aren’t new, but their effects prolong credit confusion for consumers across the UK.

Alastair Douglas, CEO of finance experts TotallyMoney, said: “Credit myths have a habit of tripping up both new and experienced credit users.”

“Second-hand advice and outdated information fan the flames of these financial fables. They cause people to miss out on credit opportunities they’re entitled to or, worse still, result in consumers being burnt by unnecessary costs because of bad credit knowledge.”

“Breaking the cycle of these credit myths means putting accurate information into the hands of consumers, which takes time. At TotallyMoney, our mission is to improve the UK’s credit score. A large part of this is tackling these long-standing myths so our customers have the knowledge they need to move on up to a better financial future.”