OFT To Work With Credit Card Companies
26th June 2007
The Office of Fair Trading (OFT) has announced a new programme in which it will work with the credit card industry and consumer bodies to make the cost of credit cards easier for consumers to understand.
The programme will explore the issues surrounding the cost of credit for credit cards including purchases, cash advances, introductory offers and payment allocation.
The announcement of the new programme follows a complaint from Which?, the consumer group, which had requested an investigation into how credit card companies calculate interest. According to Which? the top 20 credit card companies, who account for around 90% of the credit card market, charged interest in 12 different ways.
"Credit card pricing has become increasingly complex, with many new dimensions such as interest free periods. While these new pricing dimensions give additional choice and value to consumers, they can make it harder for consumers to make informed decisions. This work will consider how pricing information might be improved so as to enable better product comparison by consumers, without stifling valuable competition and innovation that benefits consumers" said an OFT spokesperson.
