Key stats from Newton’s Vulnerability Void research
- Nearly 1 in 5 (18%) consumers find, or have found, the credit card application process difficult
- Most people (65%) set up their credit card online
- Credit card debt is the most common form of debt in the UK – with 30% of those surveyed having credit card debt. This is even more likely amongst those in financial hardship – 38% of respondents struggling to make ends meet have credit card debt
Chad Rogerson, Director at Newton Europe, comments: “Credit cards come with risk if customers don’t fully understand what they’re buying or don’t use the product appropriately within their individual means. It’s important that consumers have fair access to credit, but also that they understand the ramifications of taking on debt.
Credit card providers need to pay particular attention to the requirements being introduced by the FCA’s Consumer Duty. Most people (65%) take out credit cards online, so it’s critical for digital journeys to reflect the FCA’s greater emphasis on avoiding foreseeable harm and for organisations to design online journeys which serve all customers; including the growing number of us with a form of vulnerability. If financial services providers are not making the process and implications of getting a credit card clear enough to all consumers at all stages of the digital journey, they risk regulatory consequences.
The solution lies in using psychology to understand the different needs of customers to protect them and that’s why we have developed NOVA – Newton’s Online Vulnerability Assessment. NOVA’s analysis of credit card journeys identifies how most could be significantly improved by, for example, helping customer understanding and confidence through simpler explanations of financial jargon and how interest can build over time, or helping to reduce anxiety through clearer navigation through the journey so customers know where they are and what steps they need to complete. Making credit card applications more accessible, more clearly explained, and more user-friendly is a win for everyone – customers and businesses alike.
