You are here: Home - Credit Cards & Loans -

Credit card confusion still abounds over interest rates

0
Written by:
02/04/2007

Consumers still find it very hard to compare credit cards as the way interest is calculated by each provider is not clear and that 12 of the top 20 card companies apply it in different ways.

Consumer magazine Which? said a “lower” annual percentage rate (APR) can be more expensive than a “dearer” one and that consumers were baffled by the different ways interest is calculated and charged.

Which? has demanded that the Office of Fair Trading (OFT) looks into the issue and that a standardised system is introduced.

“People simply cannot compare credit cards realistically as there are no fixed points to compare,” said retired financial adviser Peter Stanway.

“It has been calculated that if all card users had the most favourable calculation applied to their borrowing then they would save in the region of £400m a year in interest payments.

“It’s certainly not right that people cannot even usefully compare credit cards at the moment and, for that reason alone, I support the demand made to OFT for a standardised system as it would definitely make things fairer.”

However, the card issuers’ trade body, Apacs, said that consumer choice would be eroded if the system was standardised.

A spokesperson said: “There are a huge variety of cards on the market and some people prefer to have a lower APR but pay earlier, while others might like a slightly higher APR but only want to pay interest on the amount left outstanding.”

 

Tagged:

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Royal Mail to make capital charges on London letters

Royal Mail has made a proposal to postal regulator Postcomm to charge some businesses more for delivering bulk mail to addresses in London...

Close