Credit Card Information Requirements

Recommendations for more transparency in the workings of credit cards is to be asked, to be put in place to aid consumers on how much and what they have to pay back. Seen as a long over due action, the process is still very much welcomed. Anything that goes to help people re-address their debt is good news all round.

The credit card industry has been heavily criticised for the way that they push cards and cheques guaranteeing people thousands of pounds and who can ill afford to pay many of these loans back. Then added to that the way the interest rates are calculated and the charges that are added due to any late payments are confusing to most borrowers, as they are not set out in a way that is clear.

So the recommendations being set out are to include; the way that interest rates (APR) are calculated to be made plainer to understand, also payment penalty’s are to be made clearer to the borrower that any late payments will bring a charge, but to be set out in such a way that you know that the charge is fair and not over cooked.

Other measures being addressed are the summery boxes, which are to be better laid out on promotional and application forms to make clearer the information on what the minimum monthly repayments are, interest and interest free period’s by putting in place a minimum type size and a better understanding on the drawbacks on sticking to lesser payments. Also better awareness between lenders on data on customers on how much they can afford to borrow and their ability to pay back.

Unsolicited cheques are to be only sent out to card holders when requested, which will stop so many people taking on the promise of easy money at a time such as the Christmas holiday period and struggle to repay.

All this is good news for the consumer and a timely reminder for the government that the way in which people are accumulating debt because of the way it is being made available to them, and an almost total lack of understandable information that is being put forward by the lenders.