The Independent reports that the Office of Fair Trading (OFT) is going to start consulting with the credit card industry on how to make it easier for consumers to compare credit card deals.
Following complaints by Which?, they’re going to try to come up with a way of taking all of the elements of a credit card int0 account in some sort of rating – such as introductory offers, different interest rates for purchases and 0% interest deals.
Whilst I think this would be a great idea, I imagine that it will be difficult, if not damn near impossible, for them to come up with something workable, certainly given that the credit card companies will themselves be involved in drawing up the ratings, and as yet it appears there will be nothing legal forcing them to comply. The credit card companies would argue that by taking away their ability to tinker with different pricing and offers then the credit card market would be less competitive for consumers.
The card companies thrive on the misunderstanding of the various elements by consumers, and they can offer attractive headline-making interest rates for one type of transaction or to one set of customers, knowing that they’ll recoup the money in other ways. This generally means that those that know a little more about how credit cards work get their good rates paid for by those who do not understand credit cards who end up paying higher interest rates.