Majority of Finns unfamiliar with their credit card APR
Instant loans widely frowned upon, as the number of payment disturbances has risen this year
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The Finns seem to be rather sober when it comes to their credit card usage.
According to a poll commissioned by Helsingin Sanomat and conducted by Suomen Gallup, of young adults between 18 and 30 years of age, no less than 41 per cent do not even have a credit card. A fifth of the young credit card holders say that they do not use the credit facility of their combined debit and credit cards.
Of the 55 to 64-year-old respondents, nine out of ten own a credit card or a combined bank card, but again 46 per cent never use the card’s credit facility.
Nevertheless, there are those with credit card debt in both age groups: of the younger respondents just under a third and of the older group just over one in three admit to having some credit card debt at interest.
But only a couple of per cent of the respondents admit they have maxed their card up to its credit limit.
All in all, people seem to have a worryingly flimsy idea of what kind of interest they pay for the credit card usage.
Of the older respondents - most of whom own a credit card - no fewer than 28% do not know what their annual percentage rate (APR) is. For the younger group the corresponding percentage is 35.
In the Helsingin Sanomat poll measuring the difference in attitude between generations towards incurring debts, both the younger and the older respondents object to the use of instant credit to finance sudden expenses. No fewer than 80 per cent of the 18 to 30-year-old and 81 per cent of the 55 to 64-year-olds are against such “fast-track loans”.
“I have seen polls where attitudes towards express credits are even more negative than this. Nevertheless, people often resort to them”, says household economist Tarja Svartström of Nordea.
Juuso Jokela, manager of legal matters at Finland’s leading business and credit information company Suomen Asiakastieto Oy, agrees: the number of payment disturbances caused by express credits has increased this year.
Otherwise the number of new payment failures has decreased somewhat from 2007, which in turn saw a clear increase compared to 2006. By the end of September 2008, payment disturbances were recorded with 388,427 individuals, which is a couple of thousand down compared to a year earlier.
Clearly more than half of the respondents in both groups consider the practice of buying food and other daily goods on credit simply “irresponsible”. In debt counselling it is often emphasised that people should be able to cover their daily expenses from their normal cash flow. This message seems to have hit home.
Paying in instalments, on the other hand, receives a fairly positive reaction from the respondents. More than half of the young adults consider the practice sensible. For the older group the corresponding figure is 39 per cent.
Around a third of the respondents in both groups admit to having made purchases occasionally on the part-payment basis.
People’s level of income plays a role in this: the less the respondent earns, the more likely he or she is to rely on paying in instalments when making larger purchases.
Helsingin Sanomat
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| 3.11.2008 - TODAY |
 Majority of Finns unfamiliar with their credit card APR |
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