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.’
Credit card cool really is important to consumers according to a survey produced by Fool.co.uk.
Brand and reputation were found to outweigh almost all other considerations when customers select credit cards.
According to the survey:
“Eight out of ten credit card users say the brand and reputation of credit cards are more important than other factors such as balance transfer fees and long balance-transfer periods.”
Which is particularly surprising in an environment of rising UK interest rates.
“However, the importance of other issues rises to the fore when similar credit cards are compared. Measured against four leading credit cards, Barclaycard, with a typical APR of 14.9% and a 13-month 0% balance transfer period, fared best - nine out of ten customers said they are satisfied. It is a hair’s breadth ahead of Egg, MBNA and Halifax, which have slightly more expensive borrowing costs and marginally higher balance-transfer fees.”
David Kuo, Head of Personal Finance at Fool.co.uk says, “According to Fool.co.uk readers, Barclaycard is still on top some 41 years after launching the first credit card in the UK. Today, the industry boasts more than 66 million credit cards, and accounts for almost £150 billion of transactions a year.”
(Via EasierFinance)
Something I am getting asked about with greater regularity is how to manage a merchant account facility for e-commerce purposes. To be honest it’s a bit of a minefield and there are some solutions that work better than others.
One possible option is the package provided by UK based payment service provider - Axiar Payments.
The big question is what does this type of company actually add to the average e-commerce based business.
Here are some things to chew on:
Read more...
In a statement of common sense the Association of British Credit Unions (ABCUL) has recommended that “consumers worried about debt problems and issues could be far better off taking out a personal loan rather than a credit card if they are looking to raise finance.”
The Association claimed that the “set repayments associated with personal loans made debt management and repayment far easier and more manageable for those worried about effective budgeting in relation to their debts.”
I guess the issue here is that everybody needs to tailor their personal credit to their own situation. Contrary to some of the negative press, using a credit card can be a very effective form of borrowing if used correctly.
(Via UK Personal Loan Store)
I guess it’s a question of “home sweet home” when it comes to racking up expenditure on UK credit cards over Christmas.
Morgan Stanley’s recent research suggests “A total of £344 is predicted to be spent by the average Briton on their house and vehicles.”
“Groceries, at a cost of £339, are expected to be the second largest area of credit card expenditure.
Overall, Britons will spend an average of £1,270 on their credit cards between October and December 2006, Morgan Stanley indicates.”
(Via QCK.com)
