31% of credit card holders unable to repay monthly balance in pandemic

Thirty-one per cent of credit card holders have been unable to repay their balance in full each month since the pandemic began, according to new research from comparethemarket.com.

Among those aged between 25 and 34, this figure increased to 57%, which can then lead to further interest and debt accruing for borrowers due to high APR rates.

The research, which surveyed 2,021 UK credit card holders, also found that 22% of the 25 to 34 age bracket said the the pandemic has hit their finances, while 18% indicated the financial strain is a result of having to pay other household bills first.

comparethemarket.com's study suggested that across all age groups, 40% of respondents have struggled to meet repayments since the pandemic started, which increased to 49% among 35 to 44 year olds.

Missed payments 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, the study found that 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.

“It is a concern that many still struggle to pay off credit card bills,” commented comparethemarket.com head of money, James Padmore. “If a bill is not paid off in full each month, interest can build up and this can lead to other financial difficulties and stresses.

“If you are worried about repayments, there is help available. It’s strongly recommended not to miss your payments altogether and to let your card provider know if you’re having problems. The FCA has guidance for credit card providers to offer immediate support to customers facing temporary payment difficulties with payment breaks.

“However, this support is set to end soon, so it is crucial people speak to their provider as soon as possible. While interest will still accrue in this period, it could give you some breathing space and temporary relief from payments.”

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