The ‘Consumer Voices’ report, commissioned to get insight into Brits’ understanding of how credit products work, revealed that there is a lack of clarity around credit cards, and associated fees and debt – echoing many of the themes outlined in the consultation, as explained in the press release.
Clearpay believes that although regulation is required, a line needs to be drawn between BNPL and credit cards to ensure there is a clear distinction for consumers. BNPL does not operate in the same way as traditional credit, so it should not be regulated using rules created specifically for credit cards in the 1970s.
Nearly half (47%) worry about how credit card debt or credit checks will impact them in the future;
36% worry about forgetting credit card payments;
Nearly two thirds (62%) are anxious about credit card interest or fees;
50% believe that credit card payments come with unexpected charges.
In relation to financial protections, consumers value transparency on the total cost of the purchase including interest rates at different repayment rates (87%), fee-free early repayments (85%) and spending caps (81%) rather than credit scores and upfront payments.
In contrast to traditional credit cards, the research reveals that BNPL providers like Clearpay are offering a product that suits consumers’ spending needs. Consumers feel that BNPL services help them budget their monthly outgoings (47%), with over three-quarters (77%) of 18-34-year-olds saying they would be more willing to sign up for a BNPL service that doesn’t charge interest.
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