Payday loans can prevent over-hasty credit deals
(07 November 2005)

A large percentage of customers feel they have been misled by big headlines on a credit card or personal loan offer, often succumbing to the lure of a flashy new product when a payday loan could buy them more time to shop around.

A survey by Moneyfacts.co.uk showed that 55 per cent feel that a headline-grabbing interest rate has proved essentially misleading, with many finding that they do not qualify for the offer in question and thus sometimes experiencing damage to their credit rating upon applying.

The results also showed that 16 per cent of consumers have felt compelled to make an official complaint about a financial services company, fuelling the view that greater transparency about the caveats behind loan and credit deals is necessary.

Emma Butler, editor of Moneyfacts.co.uk, said: "The whole idea of an advert is to lure in new customers.

"However, there are rules in place that are supposed to stop consumers being mis-sold financial products through adverts not containing the correct information or by simply promoting headline rates for which most consumers would not qualify."

These rules include a stipulation that 66 per cent of those accepted to a credit card or personal loan should receive the "typical" interest rate.

A payday loan can provide you with valuable breathing space to ensure that you have time to make a decision with which you are comfortable.


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