Credit card confusion investigated

Confusing credit cards are set to get easier to understand, after the Office of Fair Trading (OFT) said it was working on the problem.

"Credit card pricing has become increasingly complex, with many new dimensions such as interest free periods," said OFT chief executive John Fingleton.

"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."

Sandra Quinn, of card association Apacs, expressed her 'disappointment' at the decision to conduct the review.

"We were disappointed that Which? decided to reopen the issue of interest rate standardisation. We agree with the government, which has consistently said that it has reservations about whether requiring standardisation would actually be beneficial to consumers," she said.

"Like the government, the industry is concerned that such 'standardisation would restrict or even eliminate consumer choice'."

However Which? felt the report did not go far enough.

Peter Vicary-Smith, chief executive of Which?, commented: "We presented the OFT with a simple problem - that multiple interest calculation methods were preventing consumers from picking the best credit card - and instead of tackling this head on it has chosen to do a wider review.

"While this is a positive step, why not take the bull by the horns and address this super-complaint first? We can only be sceptical about the OFT’s proposed negotiation plans with the industry - with no legal threat and no ambitious goals what can the OFT expect to achieve?

"Perhaps this demonstrates that a super-complaint to the OFT was not the right platform to achieve a breakthrough on this issue."