The Competition Commission One Of The Governments Watchdogs, Has At Last Moved To Shame Credit Cards In To Cutting Their Charges. The Long Overdue Move Comes After The Commission Concluded That The Credit Card Industry Was Overcharging Customers Between L55 And L100 Million Each Year Through Excessive Interest Rates And Other Charges. And This Has Been Going On For A Least 3 Years!The Main Culprits By Far Are Store Cards Where Interest Rates Are As High As 30.9 - Even Though The Bank Of England's Base Rate Stands At Just 4.5. The Worst Culprits Were TJ Hughes And The Faith Card Followed By Owen Owen. You Can Find Them Heading The Table Of Shame Shown Below In This Article.The Commission Has Also Come Down On High Penalty Charges For Missed Or Late Payments And Payment Protection Insurance. Average Penalty Charges Are Currently L15 Per Event - But The Commission Is Also Right To Argue That These Charges Are Excessive.As For Payment Protection Insurance, The Commission Has Joined The Consumer Body "Which", The National Consumer Council And Indeed The Financial Services Authority In Concluding That Whilst This Insurance Can Be A Good Idea, Credit Card Operators Have Abused It. The Commission Has Therefore Decreed That Payment Protection Insurance Must No Longer Be Sold In A Combined Package With A Credit Card; It Must Always Be Purchased As A Separate Stand Alone Transaction. That'll Be Good News For The Internet Where Many Of The Cheapest Payment Protection Insurance Deals Can Be Found. With Premium Savings Of Up To 60 In Comparison With Credit Card And Loan Packed Arrangements, Business On The Internet Will Flourish.So What Do The New Rules From The Competition Commission Say? The Five Main Changes Are: If A Credit Card Charges More Than 25 Interest, It Must Carry A Prominent Warning That There Are Cheaper Ways To Borrow. This Warnings Must Be Displayed On Every Monthly Statement. The Interest Rate And Penalty Charges Must Me Clearly Displayed On The Front Page Of Each Monthly Statement. The Monthly Statement Must Warn Of The Consequences In Terms Of Higher Interest Charges, Of Just Paying The Minimum Monthly Repayment. Credit Cards Must Offer Every Customer The Option Of Automatically Clearing Their Monthly Balance Each Month By Direct Debit. These Direct Debits Would Avoid Any Possibility Of Interest Charges And Late Payment Penalties. Credit Card Operators Must Not Sell Payment Protection Insurance In A Combined Package With Credit Cards. The Insurance Must Be Sold As A Separate And Optional Transaction That Enable Purchasers To See The True Cost.These New Rules Seem Destined To Shame Retailers Into Slashing Their Charges - That's Not To Say That 25 Pa Interest Is A Snip! Main Line Credit Cards Issued By Banks Are Currently Charging Around 14 To 18 And We Think That's Too High!Indeed, Between 80 And 90 Of Store Cards Held By Some 11.5 Million Customers Charge More Than 25. But Some Retailers Have Jumped The Gun Realising That Their Sky-high Charges Couldn't Last Forever. Three Store Cards Have Already Taken Steps To Trim Back. Harvey Nichols Has Cut Their Interest From 28.5 To 21.9, River Island Has Trimmed Down From 29.9 To17.9 And Monsoon From 29.9 To 18.9.But Who Are The Bad Boys? Here Is Our Table Of Shame:TJ Hughes 30.9Faith Card 30.9Owen Owen 30.7Burtons 29.9Dorothy Perkins 29.9East 29.9Evans 29.9HMV 29.9JD Sports 29.9Kwik Fit 29.9La Senza 29.9Laura Ashley 29.9Miss Selfridge 29.9Russell Bromley 29.9Ted Baker 29.9TopshopTopmam 29.9Wallis 29.9Warehouse 29.9House Of Frazer 29.3Bhs Gold Card 29.0Habitat 29.0Oasis 29.0Harrods 28.9Fenwicks 27.9Selfridges 27.6Bentalls 27.2Jaeger 27.1BQ 26.8French Connection 26.8Argos 25.9Homebase 25.9New Look 25.9Note: Some Of These Cards Do Offer Lower Interest Rates For Payment By Direct Debits. Source: Competition CommissionMoneyfacts March 2006These Credit Cards Are Operated By A Number Of Large Finance Companies, The Largest Being GE Capital The American Giant. The Profits Are Shared Between The Card Operator And The Retailer Who Is Often Incentivised By Being Awarded A Higher Share Of The Profit If They Hit Certain Key Debt Thresholds. This Has Encouraged Stores To Put Immense Pressure On Shoppers To Take Cards Out.The Chairman Of The House Of Commons Treasury Committee, John McFall Has Accused Retailers Of Putting Profit Before Customers Saying "If You Buy A Suit From One Of The Stores Then You Would Expect The Retailer To Ensure That It Was Well Made And Reasonably Priced. These Principles Do Not Seem To Apply To Their Store Cards".Lets All Hope That The Action Taken By The Competition Committee Does The Trick!
