Credit cards head towards reckoning
Consumers need more guidance on choosing and using their credit cards, two experts have argued this week.
Speaking to the BBC, personal finance commentator ROs Altman called for central regulation of the credit card industry by a dedicated watchdog.
With the average credit card interest rate standing at 18.8 per cent – way above the historically low Bank of England base rate – Dr Altmann suggested that there should be oversight of the levels of interest credit card providers can charge.
Director of debt charity Credit Action Chris Tapp, however, thinks the solution lies in informing credit card customers about what they’re getting into more fully before they take out a card.
The industry insists that the interest rates it charges are justified, and are necessary in the light of the amounts it is losing through defaults on bad debt.
There may be some truth in that – new research from slump-hit Ireland has found that credit card users are defaulting on a whopping 10 per cent of all borrowing on cards.