Young people 'opening multiple overdraft accounts'

Friday, 12 March 2010 10:44

By myfinances.co.uk staff

Young people could be risking their financial wellbeing by taking on multiple bank accounts with overdraft facilities in a bid to maximise their access to credit, a new report has warned.

Research carried out by YouGov for Callcredit found that seven per cent of adults currently have three or more current accounts in their name that have an overdraft available. This rises to nine per cent for 18 to 24-year-olds.

Of the people with more than one bank account, 14% have opened them with more than three different providers. Among those aged 18 to 24, this climbs to 27%.

In addition, the research found that nine per cent of all adults - and 11% of 18 to 24-year-olds - have overestimated how much they earn when submitting a credit application.

Some six per cent admitted to requesting access to finance knowing they could struggle to meet the repayments.

Callcredit managing director Graham Lund said that responsible lending and borrowing is "vital" to the economy and lenders need to know about all the accounts a customer has to ensure they are not overburdened.

According to Credit Action, total personal debt in the UK stood at £1.46 trillion in January.

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