Clearpay calls for more transparency about credit cards in new survey

Tuesday 30 November 2021 09:33 CET | News

Clearpay, a provider of BNPL payments known as Afterpay outside the UK and Europe, has launched a new report to uncover consumer concerns around credit products in the financial sector.

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.

With two in five (40%) Brits admitting they are confused about credit scores, the research reveals that this stems from how credit cards work: 
  • 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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Keywords: survey, BNPL, Afterpay, credit card
Categories: Payments & Commerce
Countries: United Kingdom
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