For those of you stumbling across this in a credit card offer here’s a definition:
“Performance (or Risk Based) APR is a variation on variable APR, but ibased on your payment performance. There is a standard APR when you open the account, but that APR will increase if you are late making a payment. If you are late making a payment more than once within a specified time (usually between 6 and 12 months), the APR may increase again. If the APR has gone up because of a late payment or late payments, it may go back to the standard APR if you are not late on your payments for a certain period (typically one year).”
Sifting out the wheat from the chaff should become easier in the UK credit market after a new initiative from the Office of Fair Trading.
In a recent announcement the OFT unveiled “a new programmed of work with card providers and consumer groups to make the cost of cards easier to understand.”
Yippee!! This is long overdue in the UK. Congratulations to consumer group Which? who are known to have exerted pressure on this issue stating that “consumers are choosing credit cards without understanding all the issues that affect the cost of the card.”
Interestingly OFT research indicates that most card holders don’t even bother to compare credit card deals. It’s hardly surprising when you see the sheer volume of small print bundled with each deal.
OFT chief executive John Fingleton said: ‘Credit card pricing has become increasingly complex, with many new dimensions such as interest-free periods. While these . . . 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.’
UK’s British Telecom has really gone on the front foot over the last few years. After a period of uncertainty regarding it’s fixed landline business, initiative after initiative seems to be steamrolling the telecoms market. This concerted offensive is now spreading into financial services with a credit card that offers to reduce customers bills as they spend.
The key features of this credit card are as follows:
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Posted by Tom Wilkins on Fri 6th July 2007 at 06:00 AM, Filed in US Credit Cards
Simmons aren’t a credit provider we’ve looked at before. However, their latest offering in the form of Simmons First Visa Platinum really looks the part.
Key features include:
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All credit cards used recklessly can cause debt headaches. However, it appears to be no frills cards that are currently in the spotlight.
A leading Australian researcher from Cannex retail information says:
“It only takes a few slips to turn a low-rate credit card into a penalty fee devouring monster
Most of us get caught with credit card penalties on the odd occasion but consumers who regularly incur penalty fees due to household budget pressures are building their debt,” Cannex analyst Harry Senlitonga says.
“Consumers think they are doing the responsible thing by getting a no-frills card but it can defeat the purpose entirely if the account is not managed correctly.”
Evidence suggests that an interest rate of under 10 per cent rises to about 22 per cent over a year if two late payment penalties of $25 each and two over the limit penalties of $35 each are incurred. That can really add up.
Help might be at hand with international movement on this issue.
For instance British banks are having to reduce penalty charges on credit cards, and in some cases provide refunds in light of recent legal challenges.
