Debt Survey Germany, Russia and the USA

Transcription

1 EOS Debt Survey 2015 Germany USA Russia With head and heart in finance

2 Table of contents 1. Objective and test method Summary of results Results in detail Results in country comparison Perception of debt 2. Understanding of the term debt 3. Acceptable and actual level of debt 4. Current personal debt situation 5. Personal debt history and impact on behaviour 6. Hierarchy of debts 7. Strongest sense of obligation to repay debt 3.2 Debtor typology 27 2

3 1. Objective and test method

4 Objective and test method Background and objective The purpose of the survey is to determine attitudes to debt and other financing options and the way they are used in Germany, Russia and the USA. The survey focuses on the following key issues: Debt in society Understanding of the term debt Acceptable and actual level of debt Current personal debt situation Personal debt history and impact on behaviour 4

5 Objective and test method Overview of test design and target group Method Online interviews Countries Germany, USA and Russia Sample size N = 1,000 per country Target group Representative of the population (aged 18+) of the respective countries Interview duration Max. 15 minutes Field period March

6 2. Summary of results

7 Summary of results (I) Debt is felt to be ubiquitous but represents an emotional burden Perception of debt Germany Debt is felt to be widespread: 76 percent of Germans think that a lot of people have debts nowadays. However, when it comes to their own debt, the attitude is different: only 6 percent of the Germans polled think it is normal to have debts. 79 percent of Germans try to keep their debts to a minimum. For the majority of respondents it is also very important to pay back their debts, with 84 percent stating that they feel very bad if they are unable to do so. Country comparison Compared to the other countries, Americans are most likely to believe it is perfectly normal to have debts (at 12 percent, twice as many as in the other countries). In Russia, on the other hand, people are the least likely to know exactly how much debt they have (indicated by 15 percent of the Russians polled). Russians (71 percent agreement) and Germans (64 percent) experience debt as a highly stressful emotional burden, while Americans are somewhat less bothered by having debts (60 percent). Understanding of the term debt Germany The term debt is interpreted very broadly and includes numerous payment options. Only buying on account (39 percent) and credit card payment (30 percent) are included in the definition of debt less often. There is a greater acceptance of debt for items with a solid investment grounding (e.g. property) than for short-lived consumer goods. Country comparison In Russia and Germany there is a similar rigorous definition of debt. Americans have a somewhat looser understanding of the term. In Russia in particular, exceeding a payment term is rarely interpreted as having debt. In all countries, the equivalent worth plays a similar role in the decision to take on debt. However: In the USA and Russia, people are much more willing to incur debt for capital investments, holidays and everyday consumer goods than in Germany. 7

8 Summary of results (II) The acceptable monthly repayment is much higher than the actual debt burden Acceptable and actual level of debt: Germany The reticence about debt is also reflected in the estimation of what constitutes an acceptable debt burden. While 58 percent consider monthly debt repayments of more than 300 to be reasonable, only 39 percent of respondents actually exceed this limit. Country comparison The more relaxed attitude to debt in the USA is reflected in repayment levels: 53 percent of American respondents had obligations totaling more than 750 USD per month and 62 percent think this kind of monthly burden is reasonable. Current personal debt situation: Germany Currently around half of German respondents have debts with the majority servicing mortgages (18 percent) and installment loans from banks (24 percent). Country comparison In Russia the general trend is for slightly more people to be in debt than in the other two countries. In particular, 46% are currently repaying installment loans from banks. A lot of the Americans have leasing agreements (29 percent). 8

9 Summary of results (III) More than three-quarters of respondents have already experienced debt Personal debt history and impact on behaviour: Germany 77 percent of German respondents are currently paying back some kind of loan or have done so in the past. Around every sixth borrower has been in the situation of not being able to service debts on time. For the majority (84 percent), a delay in repayment immediately causes a change in behaviour in the way they deal with debt. Country comparison In Russia most respondents (83 percent) are currently paying back debts or have done so previously. In the USA a good quarter of all borrowers have been in a situation where they could not settle their debts. Despite this, slightly fewer US respondents (75 percent) are likely to change their behaviour as a result, compared with borrowers in Germany and Russia. Hierarchy of debts depending on the equivalent worth: Germany For German respondents, the long-term nature of an acquisition and a real countervalue, like the purchase of a property or a car, increases their willingness to take on debt. They are most likely to frown upon debts incurred for plastic surgery and low-value consumer goods. Country comparison In all countries, the most acceptable reasons for taking on debt are to buy a property and for health expenses. In Germany and the USA, debts for plastic surgery procedures are the least likely to be approved, while Russia is more tolerant in this regard. Borrowing for clothing, jewellery, cash and leisure activities is rejected almost universally. 9

10 Summary of results (IV) Most of the population are debt avoiders Strongest sense of obligation to repay debt: Germany Germans feel the strongest sense of obligation to repay debts owing to family or friends whereas they feel less obligated to pay back a loan for purchasing their own house or flat. If they had to make a choice, paying these debts off would come eighth in order of priority. Country comparison Unlike Germany, repaying a loan for your own home would take precedence over debts to family in the USA and Russia. However, in terms of feeling the greatest obligation, repaying debts to family comes second. Debtor typologies: Based on various questions about attitude, a cluster formation was conducted using factor analysis. This resulted in five different types of debtors with different attitudes to the issue of debt: debt avoiders, careless debtors, occasional debtors, mortgage debtors and debt junkies. In all three countries the most common type of debtor is the debt avoider (DE 44 percent/ru 54 percent/usa 35 percent). The debt avoider is very debt-averse and perceives debts as particularly worrying. At 26 percent, the mortgage debtor is the most common type of debtor in Germany. Their attitude to debt is highly conservative. Although they feel debt to be less of an emotional burden than the debt avoiders, they still feel bad if they cannot repay debts. The USA in particular has a lot of careless debtors, with 20 percent of the population belonging to this category (cf. Germany 14 percent, Russia 12 percent). The careless debtor has fewer problems getting into debt; only five percent of this group find debt an emotional burden. 10

11 3. Results in detail

12 3.1 Results in country comparison

13 Perception of debt top 5 agreement Russians in particular find debt an emotional burden Top values (8-10) in % on a scale of 0 to 10, where 0 = don t agree at all and 10 = agree completely I feel bad if I cannot repay a debt I always try to keep my debts to a minimum I think that a lot of people have debts nowadays I don't buy something until I can afford it I find debt to be an emotional burden DE USA RU Question: Here are some statements about money and debt. Please indicate to what extent you agree with each statement. Basis n=1014/1003/1006 (DE/US/RU) 13

14 Perception of debt bottom 5 agreement In the USA, most respondents regard debt as normal; in Russia very few know exactly how much debt they have Top values (8-10) in % on a scale from 0 to 10, where 0 = don t agree at all and 10 = agree completely. Debt allows me to live the kind of life I want to live You don t have debt till a debt collecting agency asks you for money For me it is normal to have debt Debt is an investment in the future I don't know exactly how much debt I have at the moment DE USA RU Question: Here are some statements about money and debt. Please indicate to what extent you agree with each statement. Basis n=1014/1003/1006 (DE/US/RU) 14

15 Understanding of the term debt according to type Germans and Russians have a similar understanding of what debt is; in the USA there is a more relaxed attitude (I) Debt is when you cannot pay your credit card bill at the end of the agreed billing period when you overdraw your account in excess of the agreed overdraft limit when you borrow money from family or friends when you take out a loan to buy a house or flat when you take out a loan to buy consumer goods like a car, TV, furniture etc., i.e. pay the loan back in instalments when you overdraw your account and utlilise your overdraft Question: In your opinion, when does someone have debts? Please indicate to what extent you agree with each statement. Basis n=1014/1003/1006 (DE/US/RU) 15

16 Understanding of the term debt according to type In Russia, exceeding the payment term is scarcely regarded as being in debt (II) Debt is... % when you do not pay bills within the payment terms when a cheque bounces or a debit fails when you borrow a small amount, e.g. for lunch, from a friend or co-worker when you make use of 0% finance e.g. from a mail order firm, furniture store or electronics retailer when you conclude a leasing agreement for a new car/motorcycle when you use goods or services that you have not paid for yet (e.g. invoice comes later) when you pay by credit card (MasterCard, VISA, American Express etc.) Question: In your opinion, when does someone have debts? Please indicate to what extent you agree with each statement. Basis n=1014/1003/1006 (DE/US/RU) 16

17 Understanding of the term debt according to what it is used for In all countries, the equivalent worth plays a similar role when deciding to take on debt Debt for the purpose of... Buying a house or flat Buying a car or motorcycle Modernising/renovating your house or flat Medical expenses for maintaining or restoring health Your own training/tertiary education Training/tertiary education of my children/grandchildren Buying household appliances e.g. washing machine, dishwasher My own professional development/in-service training Buying furnishings and furniture Question: Debt or financing can be taken on for various purposes. For which of the following purposes would you incur debt? Basis n=1014/1003/1006 (DE/US/RU) 17

18 Understanding of the term debt according to what it is used for In the USA and Russia, people are much more willing to get into debt to make investments, for holidays or everyday items Prefer not to have debt for the purpose of... Leisure expenses e.g. for hobbies, sport Buying clothes and jewellery Financial investment (e.g. shares, funds, interest-bearing securities) Trips and holidays Cash that I can access spontaneously Purchases to meet my daily needs (e.g. food) Expenses for plastic surgery (e.g. nose, teeth, breasts) Utility costs like electricity, water, heating, phone Celebrations for special occasions like weddings, birthdays or anniversaries Buying consumer electronics like mobile phones, TVs, computer, games consoles Question: Debt or financing can be taken on for various purposes. For which of the following purposes would you incur debt? Basis n=1014/1003/1006 (DE/US/RU) 18

19 Acceptable and actual level of debt A more relaxed attitude is also reflected in the monthly debt burden: 53% of the Americans have obligations of more than USD 750/ month Monthly debt burden/repayment Actual Actual Acceptable Acceptable Acceptable Actual <100 EURO 7 16 <100 USD 4 4 <3000 Rouble EURO USD Rouble > EURO > USD > Rouble > EURO > USD > Rouble >750 EURO > USD > Rouble >1500 USD >20000 Rouble Question: In your view, what would be the maximum monthly repayment of debt that you would find personally acceptable in consideration of your financial circumstances? How high is your monthly burden at the moment for repaying all loans, instalments, mortgages and leasing agreements combined? Basis n=1014/1003/1006 or with loan/financing n=480/ (DE/US/RU) 19

20 Acceptable and actual level of debt In all three countries, around half of those with debts, only have one loan or form of financing Current loans, instalments or leasing agreements Number in % Question: Apart from your mortgage, how many loans, instalment payments or leasing agreements are you currently paying off? Basis n=1014/1003/1006 (DE/US/RU) 20

21 Current personal debt situation In Russia more people tend to have debt; in the USA leasing agreements predominate, in Germany instalment loans Current debt Instalment loan from bank Mortgage Current personal debt situation in Germany Yes, I am currently paying back debts Instalment financing e.g. from mail order company/car dealer One or more leasing agreements (Multiple responses, in percent) None of the above No, I am currently not paying back debts Question: Are you currently paying back one or more instalment loans also known as personal loans, general purpose loans, credit lines, callable loans or a mortgage? Please also consider financing agreements with mail order companies, technology or furniture retailers, and any instalment or leasing agreements for your car. Basis n=1014/1003/1006 (DE/US/RU) 21

22 Personal debt history and impact on behaviour The USA has the highest proportion of people who have at some point not been able to repay their debts 77% 79% 83% are currently paying back loans, instalments, mortgages and leasing agreements or have done so in the past 17% 28% 22% of these could not repay debt on one or several occasions Question: Are you currently paying back one or several instalment loans or a mortgage? Have you paid back loans, instalments, mortgages and leasing agreements in the past? Have you ever been in the situation where you were not able on one or several occasions to pay back loans, finance, mortgages and leasing repayments? Basis n=1014/1003/1006 (DE/US/RU) 22

23 Personal debt history and impact on behaviour Behavioral change tends to be lowest in USA, Russia similar to Germany Changed behaviour? of these could not repay debt on one or several occasions 11% 13% 6% That happens sometimes 5% 12% 10% That was a one-off situation No 16% 25% 16% Yes 84% 75% 83% 30% 25% 21% I don t take on any more debt on principle now 53% 50% 62% I only take on debt when I am unable to prevent it Question: Has your behaviour towards debt changed as a result? Basis n=176/283/218 (DE/US/RU) 23

24 Hierarchy of debts according to worth Regardless of attitude, in all countries there is a greater willingness to take on debt to buy property Country ranking by comparison: It s worth having debt for Buying a house or flat Expenditure on doctors/health Buying a car or motorcycle Training/tertiary education of my children/grandchildren Modernising/renovating house or flat Buying a property and health expenditure are the reasons most accepted for getting into debt in all countries. Modernising/renovating is less relevant in the USA. Russians are less willing to get into debt for their own training and education. My own training/tertiary education Question: You had already indicated some things for which you personally would get into debt. Which of these would be your top five reasons for which it would be worth getting into debt? Basis n=1014/1003/1006 (DE/US/RU) 24

25 Hierarchy of debts according to worth In all countries, there is minimal acceptance of debt incurred for plastic surgery and jewellery Country ranking by comparison: Debt frowned upon for Plastic surgery Buying clothing and jewellery Cash I can access spontaneously Leisure expenses, e.g. hobbies or sport Trips and holidays In Germany and the USA, debt incurred for plastic surgery is the least accepted; Russia is more tolerant in this regard. Almost universally rejected are debts incurred for clothing/jewellery and cash or for leisure expenses. Celebrations of special occasions Buying consumer electronics Question: Regardless of your own opinion, what kind of debts do you feel are generally most frowned upon and rejected? Basis n=1014/1003/1006 (DE/US/RU) 25

26 Strongest sense of obligation to repay debt In Germany, people feel the strongest obligation to repay debts to family and friends Country ranking in comparison: Debts creating obligation Money borrowed from family or friends Loan to buy house/flat Small amounts borrowed from friends or co-workers Invoices not paid by the payment term Overdrawn account/used overdraft facility Debit failure from account or bounced cheque In all countries, debts to family or friends are associated with a particular sense of obligation to repay them. Nevertheless, in the USA and Russia, financing for your own home is high up on the list. Question: For what kind of debt do you feel the greatest personal obligation? Which debt would you pay back first if you had to choose Basis n =1014/1003/1006 (DE/US/RU) 26

27 3.2 Debtor typologies

28 Debtor typology Cluster formation process A cluster formation was undertaken using factor analysis. This results in five different debtor or borrower types who have different attitudes towards debt: The clusters were determined on the basis of 20 statements on people s attitudes to debt in general. For this question the respondents could use an 11-point scale (from 0 to 10), where 0 means don t agree at all and 10 means agree completely. Agreement was graded using the values in-between. On the basis of their response pattern, a statistical process was used to combine the respondents into fixed groups with similar attitudes (clusters). These clusters can be described, and analysed and interpreted against the background of the results. 28

29 Debtor typology Explanation of cluster and factor analysis Five clusters were identified to which the respondents could be assigned according to their response patterns: Careless debtors Debt junkies Occasional debtors Mortgage debtors Debt avoiders For better interpretation of the clusters, the various attitude questions were condensed using a factor analysis; in this process, statements that are similar are combined to one factor. When representing clusters and factors together in a diagram (correspondence analysis method) the factors that are closest show in each case the typical characteristics of a cluster. country * CLU5_1 Ward Method country Crosstabulation CLU5_1 Ward Method ,00 Deutschland Count % within country 14,3% 25,7% 44,1% 6,4% 9,5% 100,0% 2,00 USA Count % within country 20,1% 13,3% 35,4% 15,4% 15,9% 100,0% 3,00 RusslandCount % within country 11,9% 2,4% 54,2% 5,4% 26,1% 100,0% Total Count Varimax % within country 15,4% 13,8% 44,6% 9,0% 17,1% 100,0% q4_15 Ich mache Schulden, damit ich mir etwas leisten kann, was ich sonst 0,75 nicht haben könnte q4_11 Schulden ermöglichen mir das Leben, das ich gerne leben möchte 0,71 q4_12 Schulden zu haben, ist für mich normal 0,69 q4_3 Wenn kein Geld da ist, muss man Schulden machen 0,64 Schulden sind Mittel zum Zweck q4_5 Ich gebe auch schon mal Geld aus, bevor ich es habe 0,60 0,39 q4_13 Schulden sind eine Investition in die Zukunft 0,57 0,34 q4_14 Eine 0% Finanzierung darf ich mir nicht entgehen lassen 0,52 0,33 q4_19 Schulden nicht zurückzahlen zu können, fühlt sich für mich schlecht an0,70 q4_10 Ich versuche, meine Schulden immer so gering wie möglich zu halten 0,68 q4_1 Ich denke, dass in der heutigen Zeit viele Menschen Schulden haben 0,68 q4_6 Schulden mache ich nur in absoluten Notsituationen 0,63 bloß keine Schulden q4_9 Schulden sind für mich emotional belastend 0,60 0,31 q4_4 Ich kaufe erst etwas, wenn ich es mir leisten kann -0,49 0,51 q4_21 Kreditgeber machen es sehr leicht, Schulden zu machen 0,49 0,35 q4_16 Kredite für den Erwerb von Wohneigentum sind für mich keine richtigen Schulden 0,70 q4_7 Leasingverträge empfinde ich nicht als Schulden machen 0,64 für Haus & Auto sind Schulden ok q4_20 Schulden hat man erst, wenn ein Inkassounternehmen Geld fordert 0,61 q4_17 Einkäufe im Internet verführen dazu, Schulden zu machen 0,79 zu Schulden wird man verführt q4_8 Die aktuellen Zinsen verleiten dazu, Schulden zu machen 0,30 0,65 q4_18 Über Schulden spreche ich nicht gern 0,68 ich habe keinen Überblick über Schulden q4_2 Ich weiß gar nicht so genau, wie viele Schulden ich zur Zeit habe 0,58 Total 29

30 Debtor typology On average, almost half are debt avoiders the USA has the largest percentages of careless debtors and debt junkies Total Country comparison Debt avoiders 45 Debt avoiders Occasional debtors 17 Occasional debtors Careless debtors 15 Careless debtors Mortgage debtors 14 Mortgage debtors Debt junkies 9 n=1014 (DE) /1003 (US) / 1006 (RU) Debt junkies n=1014 (DE) /1003 (US) / 1006 (RU) Basis: The clusters were defined on the basis of 20 statements about debt: Here are some statements about money and debt. Please indicate to what extent you agree with each of them, using a scale from 0 to 10, where 0 means don t agree at all and 10 means agree completely. You may grade your agreement using the values in-between. All respondents: data in %, values stated from p equal 10 "agree completely 30

31 Debtor typology debt avoiders Debt avoiders are very debt-averse and are the most common type of debtor in all three countries Proportion of total population In percent Total n=1014 (DE) /1003 (US) / 1006 (RU) At 45%, debt avoiders are the largest group. This type of debtor is most common in Russia (54%). This type of debtor suffers most when in debt: 55% find debt an emotional burden. 70% of this group also agree that they feel bad if they cannot repay debts. Around two-thirds (68%) try to always keep their debt to a minimum and half (50%) take on debt only in absolute emergencies, and/or do not buy something until they can afford it (55%). Social demography Debt avoiders are found in all social strata. This is not really surprising, as they make up almost half of all respondents. More than half (57%) are in the age range 40-69, i.e. middle-aged and elderly. Use of credit Their use of all types of financing/credit is below average. The largest group are currently paying back an instalment loan (25%). 58% of those who make use of credit are currently paying back just one loan. Understanding of debt 87% regard borrowing money from family or friends as debt. And for 72%, even borrowing small sums from friends or co-workers, e.g. to pay for lunch, is still a form of debt. 31

32 Debtor typology occasional debtors Generally cautious, occasional debtors are prepared to incur debt in order to afford something Proportion of the total population in percent Total n=1014 (DE) /1003 (US) / 1006 (RU) At 17%, the occasional debtor is the second most common type. In Russia, this kind of debtor accounts for around a quarter of the population, while in Germany, there are fewer occasional debtors (10%). Almost half of occasional debtors (48%) find debt an emotional burden, while three-quarters (77%) feel bad if they cannot pay back a debt. Many take on debt only in absolute emergencies (43%) and try to keep their debt to a minimum. However, they are more willing to get into debt than debt avoiders : only a third will not buy something until they can afford it. Social demography The occasional debtor tends to be younger. Nearly half (47%) are years old. Many live with children (47%) in households of three or more persons (52%). Use of credit Unlike debt avoiders, they make above average use of all types of financing/credit. The largest group are currently paying back an instalment loan (44%). More than three quarters (81%) have paid back loans in the past. Understanding of debt 86% think overdrawing your bank account/using your overdraft is debt, and 84% think that overdrawing your account beyond the agreed overdraft facility is also debt. For 91%, borrowing money from family or friends is debt. For 96%, debt is when credit card bills are not paid at the end of the agreed billing period. 32

33 Debtor typology careless debtors Careless debtors have a relaxed attitude towards debt and do not find debt much of an emotional burden Proportion of total population in percent Total n=1014 (DE) /1003 (US) / 1006 (RU) 15% can be categorised as careless debtors. At 20%, this is the most common type of debtor in the USA. They have a more relaxed attitude to debt than other types of debtor: only 5% find debt an emotional burden. And if they cannot repay debt, only 10% of them feel bad. 6% said they would incur debt only in absolute emergencies and only 8% do not buy something until they can afford it. Nevertheless, the careless debtors are self-determined debtors. Only 3% believe that shoppping online leads to debt and only 6% think that lenders make it very easy to get into debt. Social demography Generally younger. More than half (55%) under 40 years old. 58% of careless debtors are male. A good half (53%) of careless debtors are in full-time employment. 72% have no tertiary education. Use of credit The largest group are currently paying back instalment loans to banks (28%). More than half (54%) of those taking advantage of credit are currently paying back just one loan, while 32% are also paying back two loans. Understanding of debt In each case, just 60% of careless debtors think that overdrawing your account and using an overdraft are debts; likewise, if you overdraw your account beyond the agreed overdraft facility. Not even half (45%) of careless debtors think that 0%-financing is a form of debt; 46% do not consider using a credit card to be a form of debt. 33

34 Debtor typology mortgage debtors Cautious and conservative, the mortgage debtor, who is often German, will take on debt to buy a home Proportion of total population in percent Total n=1014 (DE) /1003 (US) / 1006 (RU) The mortgage debtor is especially prevalent in Germany (26%) but is rarely found in Russia (2%). They perceive debt as less of an emotional burden (44%) than debt avoiders and occasional debtors, but feel bad if they cannot pay back a debt (78% agreement). 43% incur debt only in absolute emergencies and more than half (56%) do not buy something until they can afford it. 76% of mortgage debtors try to keep their debt to a minimum. More than half (54%) completely agree that lenders make it very easy to take on debt. Sozial demography On average a bit older: 51% are more than 50 years old. 48% are in full-time employment and many already retired (18%). More than half (53%) live in smaller towns (<50,000 people). 47% live in their own home. Around half with a higher education*. *DE: at least tertiary entrance qualifications, US: at least college grad., RU: higher/ academic degree Use of credit As the name suggests, the largest group, 27%, are currently paying back a mortgage. In this target group, instalment loans are less prevalent (17%) than in the overall sample (29%). Two-thirds of those who make use of credit are currently only paying back one loan. Understanding of debt The majority (83%) understands overdrawing your account and using your overdraft to be debt; 89% think that exceeding the agreed overdraft limit is also debt. For 94%, credit card bills not paid by the billing period are a form of debt. 88% agree that borrowing money from family or friends is getting into debt. 34

35 Debtor typology debt junkies Debt junkies are very frequent users of financing/credit and feel that they are enticed into doing so by others Proportion of total population in percent Total n=1014 (DE) /1003 (US) / 1006 (RU) At 9%, the debt junkie is the least common type of debtor. However, in the USA almost every 7th respondent (15%) belongs to this category. Only 35% of them find debt to be an emotional burden. And if they cannot pay back debts only 55% of them feel bad about it. Almost a quarter (23%) of debt junkies think that online shopping encourages people to get into debt, and almost half (45%) even think that lenders make it very easy to get into debt. Only 6% take on debt only in absolute emergencies and the same number agree that they do not buy something until they can afford it. Social demography The debt junkie tends to be middleaged. More than half (53%) are between 40 and 59 years old. Two-thirds have a lower income*. They are predominantly female (58%). A good half (51%) have an intermediate level education.** * DE: up to 2,000 Euros/month, US: less than 75,000$/year, RU: less than 21,000 RUR/month ** DE: lower secondary school, vocational/technical/commercial college, US: high school graduate, some college, associate degree, RU: secondary / technical school Use of credit All types of financing/loans are used exceptionally often: mostly instalment loans (41%), followed by mortgages. Two-thirds of those making use of credit are paying off more than one loan. 86% have already paid back loans and 39% have already been in the situation of being unable to repay a debt. Understanding of debt For 85%, overdrawing your account/using overdraft is debt, for 82%, exceeding the agreed overdraft limit is a form of debt. The largest group (96%) agreed that a loan to finance the purchase of a house or flat is debt, followed by 95% who believe that not paying your credit card bill at the end of the billing period is a form of debt. 35

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