Credit card interest calculation methods

11 February 2008
The OFT has announced a series of recommendations to help consumers choose a credit card. OFT research shows that 70 per cent of credit card holders did not shop around before selecting their current card, and this means they could be placing themselves at a financial disadvantage.

The OFT has recommended that:

• an independent credit card price comparison website is introduced by the FSA
• improvements are made by the credit card industry to the way that information is presented in summary boxes
• terminology used by card issuers is standardised
• there is a consumer education campaign which highlights the benefits of shopping around.

OFT will work with the credit card industry and with the FSA to implement these recommendations as soon as is possible. This announcement follows on from the OFT's response to a super complaint by Which? into credit card interest calculation methods.

Download the Credit card comparisons report (pdf 214 kb).

26 June 2007
The OFT is to carry out a new programme of work with the credit card industry and consumer bodies to make the cost of credit cards easier for consumers to understand.

This decision follows a super-complaint from Which? that highlighted that consumers are choosing credit cards without understanding all the issues that affect the cost of the card. OFT research shows that the majority of card holders do not compare cards at all. This new work will explore the issues surrounding the cost of credit for credit cards including purchases, cash advances, introductory offers and payment allocation. This work is expected to take six months, and will involve close work with the credit card industry, consumer groups, other regulators, government bodies and other key stakeholders.

Download the OFT response to the super-complaint by Which? (pdf 165 kb).

See press release 91/07.

2 April 2007
The OFT has received a super-complaint from Which? relating to credit card interest rate calculation methods.

Back to: Super-complaints