Comparing Credit Cards By The Office Of Fair Trading

The launch of a credit card comparison website that is run by the Office of Fair Trading has just been released. The watchdog has decided there needs to be a website for consumers to compare credit cards since a study was just completed. The study completed showed that seventy percent of the individuals in the UK do not actually shop around for a credit card. Instead they just choose a card and as a result they are losing more money than necessary. The Financial services authority decided to help out in the operation of this independent card site to help the market.

The site is going to offer accurate information regarding how to compare credit cards so that consumers can make better choices. The information will list the interest rates, as well as the newest deals from companies for consumers who decide to take advantage of the website. The Office of Fair Trading has also asked that the information be presented better by the credit card companies. In other words the Office of Fair Trading doesn’t want to see small print, but instead tables and a standardisation of terms provided to consumers.

The Office of Fair Trading received several complaints regarding the explanation of annual percentage rates and how they would affect the consumer’s cards. The residents of the UK are losing about 400 million pounds a year total on interest rates because the calculations the companies use are not explained in a manner most can understand. The Office of Fair Trading believes the consumers will benefit more from actual comparison information in a table format over the explanations of the repayment calculations. The Office of Fair Trading believes the fault lies in the different offers available and that the consumer has no way to compare all of the information regarding the complex products available.

The survey found that the consumers are choosing a card based on recommendation from their bank. In other words rather than doing research they are just trusting their financial bank advisors. It seems those who are less likely to shop around are the pensioners, low income families, and those without access to internet. The overall issue is that no one wants to through money away, but the consumers are doing just that by not have a source for comparison so the Office of Fair Trading is trying to make that information more available to more individuals in the UK.

Back To Financial News February 2008

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Understanding Lifetime Mortgages
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Comparing Credit Cards by The Office Of Fair Trading
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