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"OFT wants consumers to be more mindful about comparing credit cards"

By admin | October 3rd, 2008 | Featured

At aw time when global credit conditions have left many households in the UK suffering severe financial strains it has become increasingly important for consumers to try and keep their monthly outgoings down as much as possible, and this includes the cost of borrowing. However, there are concerns that over recent months many consumers have been failing to take the time to shop around in order to compare the cost of borrowing, resulting in many getting a raw deal on their borrowing and paying far more than they would have had to had they compared a range of deals.

This is particularly true of credit cards, and even the Office of Fair Trading recently expressed concern over the fact that many consumers were not taking the time to compare different credit cards from a range of providers, thus robbing themselves of the chance to save money on their monthly repayments and overall. In the current financial climate it has become increasingly important for borrowers to shop around to get the best deal. Also, officials have stated that the cost of borrowing on credit cards, such as interest rates, fees, and charges, has rocketed over the past couple of years, and those that fail to shop around could end up paying the price.

According to officials from the Office of Fair Trading around 70% of those that have applied for a credit card over the past three years have failed to make adequate comparisons amongst providers and different credit cards.

Around 13% of consumes only bothered to compare around three cards before making a decision, and over 30% simply went with whichever card their bank recommended. Officials have said that this failure to compare credit cards before making a commitment was damaging the chances of consumers to get a suitable and affordable deal on their credit card.

Officials have also recently expressed concern that it could be confusing financial jargon that credit card providers use on their websites and marketing materials that is putting some people off from making comparisons – authorities have been telling card companies to be clearer and more transparent about the charges and rates on their cards to try and ease this problem. The Office of Fair Trading even set up a comparison facility for credit cards on its website earlier this year, to provide further assistance to consumers looking for a fair and affordable deal on a credit card.

With the availability of the Internet, a range of price comparison sites offering comparison facilities, and even the assistance of the OFT consumers should no longer find it a difficult or time consuming task to compare a range of credit cards from different providers, and this could make a big difference to the amount that the average consumer pays for borrowing on a credit card.

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