MPs aim to clear up card charges

THERE are over 1,500 credit cards on the market from more than 60 companies, making it hard to find the best deal, writes Clare Francis.

But consumers could soon find it easier to compare charges. The Treasury Select Committee is investigating the industry, and clarification of charges is one of the issues on the agenda.

Nationwide building society is calling for the introduction of “consumer boxes” that clearly display all costs, including late-payment charges, annual fees and the interest-free period. It has already introduced the system on its own cards. Last week, HBOS announced it will introduce “clarity boxes” next year.

Consumers often fall foul of unexpected charges. For example, Capital One’s No Hassle Platinum card has a six-month interest-free period for purchases, after which you pay the standard rate of 13.21%. The balance transfer rate is 4.9%. If you withdraw cash with your card, you are charged 20.5%.

If you use your card for all three purposes and make partpayments each month, the cheapest debt is cleared first leaving you accruing interest at the highest rates. Most issuers adopt the same practice, with the exception of Nationwide, HSBC and First Direct.

MPs also want clearer information on risk-based pricing, where the interest you pay depends on your credit rating.