OFT publishes credit card comparisons report

The OFT has published its report into credit card comparisons, which makes
a series of recommendations to help consumers choose a credit card. Download
a copy of the report from the OFT website : www.oft.gov.uk.

The report follows a super-complaint from Which? that highlighted that
consumers choose credit cards without understanding all the issues that
affect the cost of the card. OFT research shows that 70 percent of credit
card holders did not shop around before selecting their current card, and
that this meant they could be placing themselves at a financial disadvantage.

Research into the report involved looking at issues surrounding the
comparative costs of using different credit cards for purchases, cash advances,
introductory offers and payment allocation. The research followed work with
the credit card industry, consumer groups, other regulators, government
bodies and other key stakeholders. The main recommendations are :

- the introduction of an independent credit card price comparison website
run by the FSA,

- improvement to how information is presented in credit card issuers'
summary boxes,

- standardisation of terminology used by credit card issuers in their product
literature, and

- improvements to consumer education about the benefits of shopping around
for a credit card.

The OFT will work with the card industry to implement the improvements to
summary boxes, standardisation of terminology and education campaign.

John Fingleton, OFT Chief Executive said:

'No-one wants to throw money away, but consumers who don't shop around
for credit cards are doing just that. It is essential that consumers are
given the right tools to make comparisons between credit cards more easily,
and we can achieve this through some of the recommendations announced today
which have received widespread support from the FSA, APACS and the rest of
the financial sector.'

The OFT will work with all the relevant parties to implement these
recommendations.