Originally published February 20 2005
Members of Britain's Parliament have called for credit card companies to make their charges and rates clearer to customers
by Mike Adams, the Health Ranger, NaturalNews Editor
Prominent members of Parliament are calling for credit card companies to make their charges and interest rates clearer to cardholders in order to help customers understand how they are being charged. In particular, the many different methods of calculating interest charges are confusing customers and leading them to make poor financial decisions. One method of helping cardholders may be to standardize interest calculations.
Following a two-year inquiry into the credit card industry, the Treasury Select Committee today published its findings.
Along with calling for greater transparency from lenders on penalty charges and interest rates, the committee said that sending out unsolicited credit card checks should be stopped, payment protection insurance should be investigated by the Financial Services Authority, and lenders should share more information to prevent people building up huge debts over several cards.
But there was some praise for the work the credit card industry has done since the committee's last report in 2003.
Treasury Select Committee chairman John McFall noted: "Consumers still deserve a better deal from credit card companies.
Since the last report was issued credit card providers have standardized the way interest rates are calculated and introduced a summary box to provide the headline charges on their cards.
This means in some instances cards with a higher headline rate of interest can work out cheaper.
"As one issuer has acknowledged, an illusion can be created that a deal is better than it really is.
The industry needs to tackle this problem as a matter of urgency, if necessary through some degree of standardization of interest calculation methods."
personal finance campaigner, said: "The report clearly shows that misleading and confusing practices are still rife in the credit card industry.
Jill Johnstone, director of policy at the National Consumer Council (NCC), added: "The committee's key recommendations home in on the problem areas that welcome new credit laws - now on their way through parliament - fail to address.
During its inquiry, the Treasury committee heard evidence from the chief executives of seven of Britain's biggest credit card issuers: Barclays, Capital One, Halifax Bank of Scotland, HSBC, Lloyds TSB, MBNA and Royal Bank of Scotland.
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