Tuesday 10th October 2006
Credit card comparison could be aided by printing cigarette-style warnings on high-interest products, a finance expert has suggested.
Jim Spowart, founder of internet bank Intelligent Finance, proposed that all cards with a rate over ten per cent above the Bank of Englands base rate should carry an advisory notice.
"What we need is legislation in the UK which would insist that lenders highlight the fact that they are charging 200 per cent above the Bank of Englands base rate," he said.
The Banks monetary policy committee voted last week to keep the base rate at 4.75 per cent. Mr Spowart noted that while personal loans typically have interest rates around 5.8 per cent, credit cards average as much as 15.9 per cent.
However, cards such as Barclaycard Simplicity and American Express Blue feature lower rates of 6.8 per cent and 6.9 per cent respectively.
Mr Spowart wrote to chancellor Gordon Brown to suggest the comparison assistance, which he believes could help protect shoppers from higher-priced products.
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