Is our need for speed costing us money?

We now live in an era where money and life are moving faster than ever. Our modern society is driven by a desire for speed, quick decisions and connectivity, which is great, but is this costing us money?

We used to say 'Cash is King'

Our views on credit and debt used to be somewhat different perhaps because there were less options. Over the last 50 years, our use and options around credit have increased, it’s now an integral part of the modern world, one that we can’t operate without.

Credit is designed to make life easier and generally breaks larger sums into smaller, more manageable, normally monthly, payments. This benefit often comes at a cost, which is often more expensive than we realise particularly now with the range of options available. The potential cost is normally shown as a percentage (Annual Percentage Rate – APR) on any loan or credit agreement, however many of us don’t notice this percentage, our attention is focused on ‘are the monthly payments affordable?’ rather than appreciating the overall cost of the credit.

The costs often feel ‘invisible’ because the borrowing is paid in small amounts over time, we want instant decisions and the ability to apply or access information via an APP. Our focus is drawn to the affordability of the monthly payment rather than the overall cost of the credit or borrowing. This can cost us money, in some cases thousands of pounds, as we overlook other, often cheaper, providers or options.

Financial pressure can cause us to focus on speed of decision rather than overall cost of the potential solution.

Perhaps because we perceive this as taking control and have been influenced by advertising, sponsored search placement or social media presence. Many providers quote ‘representative APR’ rather than the rate that you will be offered, providers only need to offer the representative rate to 51% of approved applicants. We overlook overall cost perhaps because the link between APR and real cost isn’t always clear. The real cost can increase particularly when payments are missed or are late due to penalties being applied.

We want to improve your understanding of credit, we want you to ask one simple question “What will this actually cost me over time?”. If you reviewed your current borrowing, could you save money by switching to another provider or product, key to this would be to look at the overall cost or rate shown as APR.

There have never been more people under financial pressure than there are now, could you save money by undertaking a little research or speaking to a trusted provider, one that isn’t motivated by profit, commission or shareholders but by helping people and improving their situation?