Thursday 3rd January 2008
Young people in the UK are failing to carry out any sort of credit card comparison when signing up for new lending products, according to one personal finance institution.
Credit reference firm Checkmyfile has carried out its latest Banking and Credit Card Survey and has concluded that younger shoppers are those most likely to look for credit from high street lenders.
They are least likely to visit a credit card comparison website to search out a better deal, will often take cards without comparison from their existing bank and are most likely to sign up for store cards, the firm has found.
Meanwhile, in stark contrast, those aged between 55 and 65 are the most likely to use price comparison websites - as well as being least likely to respond to mail-outs from credit card firms looking to gain borrowers.
Barry Stamp, joint managing director of Checkmyfile, remarks: "Our survey shows that the relatively credit hungry 22-34 age group tends to borrow from a narrower range of lenders, without the same regard for the overall cost of credit as taken by older borrowers."
He added that once such consumers had acquired "entry-level" Visa or MasterCard products, they were the demographic most likely to use the cards as a springboard to apply for more credit.
"We calculate that the average 22 to34-year-old could save almost £400 in lower interest costs if financial comparison websites were used either at the outset, or if maxed-out borrowers switched to cheaper credit deals," Mr Stamp continued.
Meanwhile, for those seeking out alternative forms of credit, price comparison service MoneyExpert.com has called on borrowers to make the most of the free overdraft facilities offered by many high street lenders.
The company states that, while many lenders offer such a service, very few will implement it without initial prompting from the consumer.
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