UK Office of Fair Trading Works To Ease Consumer Credit Card Understanding
The UK's OFT has announced a new work effort with the UK credit card industry and consumer bodies to "make the cost of credit cards easier for consumers to understand."
This decision follows a super-complaint that highlighted that consumers are choosing credit cards without understanding all the issues that affect the cost of the card. OFT research shows that the majority of card holders do not compare cards at all. This new work will explore the issues surrounding the cost of credit for credit cards including purchases, cash advances, introductory offers and payment allocation. This work is expected to take six months, and will involve close work with the credit card industry, consumer groups, other regulators, government bodies and other key stakeholders.
John Fingleton, OFT Chief Executive, said: "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."
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