Need to borrow? Want to save?
Get fair, unbiased advice in a language you understand
so you make the right choice.
Credit Cards ‘Beyond Comparison’
(13-02-08) - The Office of Fair Trading (OFT) has criticised credit card companies for making the terms of their cards so complex that they’re beyond comparison with each other.
A survey conducted by the OFT found that 70% of credit card customers are not shopping around for the best deal, and could therefore be wasting money and missing out on benefits.
OFT chief executive John Fingleton said:
‘It is essential that consumers are given the right tools to make comparisons between credit cards more easily, and we can achieve this through some of the recommendations announced today’
The recommendations detailed by Fingleton and the OFT are as follows:
A card comparison site to be launched by the Financial Services Authority (FSA)
Improved presentation of credit card issuers’ summary boxes
Standard terminology in credit card product literature
Improved consumer education about the benefits of shopping around.
The top 20 card issuers in the UK use 12 different methods to work out their interest charges. As a result, a card with a low level of APR could end up being more expensive than a card with a higher level of APR, making a mockery of this paradigm as a comparable quality.
The OFT report said that not only were credit cards inherently expensive ways to borrow, they were also complicated.
Chris Eagle, Commercial Manager at CreditChoices, understands that there is a lot to consider when choosing which card to apply for:
‘Credit card companies use confusing language when describing the nature of their cards, and tend to overburden their customers with technical jargon to the point where it goes largely unread. Take a look at our credit card guides for a no-nonsense, unbiased view of each different type of card.'
