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Impact of High Interest Card Debts on Debtors' Quality of Life - Survey Report

This survey report by Dr. Robert Ting-Yiu Chung examines the effects of high interest card debts on debtors' quality of life. It explores credit card usage behavior, challenges in clearing all card debts, and the impact on financial and psychological aspects. The report also analyzes respondents' knowledge on balance transfer plans and their benefits.

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Impact of High Interest Card Debts on Debtors' Quality of Life - Survey Report

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  1. How High Interest Card Debts Affects Debtors’ Quality of Life Survey Report Dr. Robert Ting-Yiu Chung Director of The Public Opinion Programme, University of Hong Kong

  2. Survey Overview

  3. Respondents' Profile

  4. Gender Successful cases：501

  5. Age Successful cases： 498

  6. Educational Level Successful cases： 498

  7. Occupation Successful cases： 497

  8. Monthly Personal Income Successful cases： 476

  9. Survey Findings

  10. 1. Credit Card Usage Behavior

  11. Respondents owned 3.5 credit cards on average at a time2% owned 10 credit cards or above Q：How many credit cards have you owned at your prime? Avg ：3.5 cards Error：0.09 cards Base ：499 Successful cases： 501

  12. Avg ：$7,164 Error：$252 Base ：493 Respondents on average spentHK$7,164on credit card at that time10% spent over HK$20,000 per month Q：What was your average monthly credit card spending (including both payment and advanced cash withdrawal) then ? Successful cases：500

  13. 2. Challenges in Clearing All Card Debts

  14. Don’t know/ Hard to say, 3% Almost half of respondents opted for partial repayment of card debts Q：In general, will you repay all credit card debts? Successful cases：501

  15. Avg ：29.8% Error：1.73% Base ：245 For those making partial payment,30% opted for settling minimum payment Q：If not, what percentage of the debts will you settle in general? Successful cases：245

  16. The triggers for revolving credit: gripping cash; cash flow only sufficient to cover minimum payment Q：Why didn’t you repay all card debts? Successful cases：244 (Multiple answers)

  17. 37% 37% considered making full repayment of card debts difficult Q：How difficult do you think repaying all card debts is? Successful cases：501

  18. Difficulties in making full payment:63% blamed the high interest rate of credit card 59% overspent on credit cards without noticing it Q：Why it’s so difficult to repay all card debts? Successful cases：184（Multiple answers）

  19. Amongthose who are unable to make full repayment: 47% would borrow from banks or financial institutes;48% would pay all he/she had; 41% would wait for double salarypay or year-end bonus Q：Whom will you turn to for help if you cannot repay all card debts? Successful cases：242（Multiple answers）

  20. 3. The impact of high interest card debts on respondents’ quality of life

  21. Over 80% thoughtdebts from high interest rate credit cards affected their financial statusNear 50%felt they would be controlled by card debts, more careful in spending, would not have enough money to spend and would have no savings Q：Which of the following do you think would happen if you cannot repay all card debts? Successful cases：501（Multiple answers）

  22. 75% considered debts from high interest rate credit card affected their psychological aspect30-40% thought they would feel stressful,afraid that their family members and friends would know about their situation Q：Do you think the following would happen if you cannot repay all card debts? Successful cases：500（Multiple answers）

  23. Over 90% respondents thought high interest rate credit card debts affect their daily spending behavior mainly because they would have Reduce shopping and spending on meeting with friends Q：Do you think the following would happen if you cannot repay all card debts? Successful cases：501（Multiple answers）

  24. 50% respondents thought high interest card debts affect their work: About 20%afraid of receiving payment reminder calls and had problem in concentrating on their work Q：Do you think the following would happen if you cannot repay all card debts? Successful cases：499（Multiple answers）

  25. 4. Knowledge on Balance Transfer Plans

  26. Almost 90% respondents have heard of balance transfer plans Q：Have you ever heard of balance transfer plans? Successful cases：501

  27. Benefits of balance transfer plans to respondents who have heard of it:Fixed monthly repayment amount, a good grasp of the situation facilitated by consolidated accounts and controllable repayment schedule Q：What are the benefits of balance transfer plans? Successful cases：444 （Multiple answers）

  28. Wish list for ideal balance transfer plans to those who have heard about that:Maintainquality of life; flexibility to make adjustment after the plan is proposed; personalized services from specialists for customized financial management Q：What other advantages do you think balance transfer plans have apart from the mentioned items? Successful cases：444（Multiple answers）

  29. 93% of those who have heard of balance transfer plansagreed balance transfer plans help shorten repayment period Q：Do you think balance transfer plans are effective solutions for clearing card debts earlier? Successful cases：443

  30. Conclusion

  31. High interest card rates make full payment difficult • Survey reveals that nearly half of the respondents chose to make partial repayment and among them, over 50% explained: • Some wanted to have more cash in handand some said they only have enough cash flow for minimum payment or partial repayment • 37% considered making full payment difficult: • Reasons： Interest rate of credit cards was too high; some have overspent by their credit cards without noticing it. • Respondents who would not settle all the payment would usually repay all they had at that time, borrow from banks or financial institutes or wait for double pay or year-end bonus.

  32. Impact of high interest card debts on debtors’ quality of life • Impacts on financial status (87%) : • Feel card debts take control over life • More careful in spending • Not enough money to spend • No savings • Impacts on daily consumption behavior (93%) : • Reduce shopping and spending on meeting with friends • Impacts on emotional aspect (75%) : • Feeling stressful • Afraid their families would find out their problem • Hating themselves for overspending • Impacts on work (50%) : • Afraid of receiving payment reminder calls during working hours • Had problems in concentrating on their work

  33. Balance transfer plans help shorten repayment period • A majority of respondents had heard of balance transfer plans and those who have heard of it thought its benefits included: 1) fixed monthly payment terms, 2) clear list of financial standing and 3) have a good grasp of repayment schedule. They considered balance transfer plans could help settle card debts earlier. • For those who have heard of balance transfer plans, their wish list of balance transfer plans included: • Quality of life being kept after adopting balance transfer plan • Flexibility in changing payment plans after adoption • Consultancy services arranged for customized financial management

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