OFT considering credit card confusion
The Office of Fair Trading has said it is “working on” the problem of confusing credit cards. The OFT’s chief executive said that it is working to improve how pricing information can be improved without hurting competition between card providers or limiting innovations that benefit cardholders. The goal is to enable cardholders to make more informed decisions about their credit cards.
The inquiry that led to the OFT review of credit card pricing was set in motion by a complaint from consumer website Which? that different ways that different card providers calculate interest were making it more difficult for consumers to pick the best credit card deal. However, Which? is not satisfied with the wider review of the industry, with its chief executive complaining that the OFT should have approached the specific question “head on” rather than taking the approach it has. Still, Which? called the OFT move a “positive step”.
Meanwhile, a representative of card association Apacs said that it is “disappointed” that Which? even brought up the issue of rate standardization, saying that the government shares its concern about whether standardization of interest rate calculation methods would benefit customers. The Apacs spokesperson said that the industry fears that standardization would restrict or eliminate consumer choice.
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