CHARLOTTE, N.C., Aug. 7, 2015 /PRNewswire/ -- LendingTree®, the
nation's leading online loan marketplace, recently conducted a
survey among a nationally representative sample of 3,170 Americans
to gain insight into credit card behaviors, sentiments and
knowledge. Of the 2,462 Americans who stated they owned at least
one credit card, many don't know where they financially stand with
their credit accounts. Forty-two percent of Americans did not know
the combined total credit limit of their credit cards and 58
percent did not know the highest annual percentage rate (APR) of
their credit cards.
While many respondents pay off their entire credit card balance
each month (almost 52 percent) and therefore pay little attention
to APRs, not everyone is as diligent. Of the 58 percent of people
who did not know the APRs of their credit cards, nearly 40 percent
(38.06%) carried a credit card balance to the next month, incurring
interest fees. This translates to a little over one-fifth of
card-carrying Americans paying credit card interest without even
knowing what the interest payments are.
"Credit cards can be a very convenient and beneficial form of
payment when managed responsibly," stated Doug Lebda, CEO of LendingTree. "But when you
make purchases using a credit card and carry the balance from month
to month, you incur interest – effectively increasing the price of
your purchases by fifteen to twenty-five percent, depending on your
interest rate. Miscalculating a budget or not understanding how
interest rates can affect your bottom line can lead to consumers
being in unexpected credit card debt."
The survey also found 40 percent of Americans did not know their
credit utilization ratio, or the amount of debt one owes in
comparison to their maximum credit debt allowance. Without
knowing your total credit limit, you cannot calculate your credit
utilization.
A previous study done by LendingTree showed that less than a
quarter knew that credit utilization accounts for approximately 30
percent of one's credit score. In this latest survey only 14
percent of Americans did not know which credit score band they fell
into. But in the previous study, data showed that when asked in an
open-ended question to provide their credit score, nearly 60
percent of Americans didn't know their exact credit score or
provided an implausible value.
"Credit bands only represent a general view of where one stands
financially and the bands can be pretty broad. Two individuals both
with "very good" credit scores can still get very different rates
and offers. A person with a 750 score is likely to get a much
better deal than someone with a 720," said Lebda. "To get the best
financial rates and offers, it's best to keep track of your credit
score and know what could affect it. Having a solid grasp of your
credit situation can save you significant money, but it's also just
simply good practice to make sure your finances are correct and
you're not victim to a reporting error or credit fraud."
There are a number of financial tools available online that can
help track your credit score. LendingTree's My LendingTree platform
is a free service that provides monthly credit score updates and
insights on how one can improve that score. LendingTree has
recently upgraded its platform to also provide savings alerts and
recommendations for an individual's financial accounts including
mortgages, auto loans, personal loans, and more.
To view the original press release version in the LendingTree
Press Room, please visit:
https://www.lendingtree.com/press-release/americans-dont-understand-their-wallet
Methodology
The 2015 U.S. Credit Card Survey was conducted online within
the United States by SurveyMonkey®
on behalf of LendingTree between July 16 and
July 21, 2015 among a nationally representative sample of
3,170 Americans ages 18 and up.
About LendingTree
LendingTree (NASDAQ: TREE) is the nation's leading online loan
marketplace, empowering consumers as they comparison-shop across a
full suite of loan and credit-based offerings. LendingTree
provides an online marketplace which connects consumers with
multiple lenders that compete for their business, as well as an
array of online tools and information to help consumers find the
best loan. Since inception, LendingTree has facilitated more than
55 million loan requests. LendingTree provides free monthly credit
scores through My LendingTree and access to its network
of over 350 lenders offering home loans, personal loans, credit
cards, student loans, personal loans, business loans, home equity
loans/lines of credit, auto loans and more. LendingTree, LLC is a
subsidiary of LendingTree, Inc. For more information go
to www.lendingtree.com, dial 800-555-TREE, like
our Facebook page and/or follow us on
Twitter @LendingTree.
MEDIA CONTACT:
Megan Greuling
704-943-8208
megan.greuling@lendingtree.com
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SOURCE LendingTree