Credit card holders confused by interest free periods, warns moneynet
February 15, 2006 (PRLEAP.COM) Business NewsConfusion surrounding the small print on credit card agreements is leaving card holders in the dark when it comes to paying bills on time, according to new evidence from online financial data provider Moneynet (http://www.moneynet.co.uk )
Moneynet argues that wide variations between plastic providers in the length of interest free time allowable on their cards has created confusion among consumers.
The end result, warns Moneynet, is that card firms are boosting their profits while prudent card holders are being penalised.
“The recent decision by some major card firms to slash interest free periods is bound to prompt rival card firms to follow suit,” said Moneynet chief executive Richard Brown.
“The majority of adults now carry at least two credit cards and an average of one store card, and with different clauses surrounding interest free days from card to card, it’s no wonder that people are in danger of being caught out.”
Prudent card holders who want to clear their debt typically have up to 56 days grace in which to do so. But by reducing this ‘free’ time, credit card companies are more likely to be able to drive up profits.
Moneynet also reports mounting anecdotal evidence of its users being caught out by varying rules between card companies.
“One issue is precisely when an interest free period begins and ends,” argues Brown.
“There is not an interest free period on purchases with the majority of cards, for example, if the monthly balance is not cleared in full and on time. But in our view card firms do not make this clear enough. In addition, the fact that some companies charge interest from the date of purchase whilst others are charging from the date the transaction is charged to the account only adds to the confusion.
“Part of the problem is that there is so much crucial detail buried in the small print - we’d like to see a standardised warning printed on credit card statements detailing in the simplest possible terms what interest free privileges card holders enjoy. And what kind of financial penalties they can expect if they do not clear their balance every month.”
Consumer enquiries: 0208 460 2833/ http://www.moneynet.co.uk
Richard Brown, Chief Executive, 020 8313 9030
David Andrews, David Andrews Media Ltd 07941 255855/01273 774109
Moneynet.co.uk is the UK’s longest established online personal finance research and data analysts. The company offers consumers a choice of thousands of low cost financial services products. From mortgages, personal loans to motor, home and medical insurance, credit cards, savings accounts and best buy fixed rate products, Moneynet is one of the most comprehensive online services of its kind in the UK. Founded by chief executive Richard Brown, the Moneynet brand is destined to become one of the UK's major players in consumer finance products.