26th June 2013
This is certainly an interesting development from the trade body which represents the UK’s credit card companies, the UK Cards Association. It has launched a website to help consumers struggling to get their heads around what they owe and the APR calculation in particular work out what it will cost them in real terms.
Such a move is to be applauded. The site is at www.cardcosts.org.uk. The new online tool was created following a research project undertaken by the very well respected Personal Finance Research Centre (PFRC) at the University of Bristol.
The UK Cards Association says the CardCosts website will allow credit cardholders to:
・ Gain a better understanding of the cost of their current repayment choices
・ Experiment with different levels of payments and desired periods to pay off a balance
・ Learn from a range of informative messages which explain what can be complicated terms
・ Link to other help and guidance, such as credit card statements and summary boxes and
・ Quickly receive details of sources of free independent debt advice.
That is a pretty ambition list but as we say if it helps a knowledge shortfall or even marginally cuts back the numbers getting into debt problems it will be good news.
The chair of the association Melanie Johnson, a former Labour MP who had a stint as minister for competition and consumers, says: “The website looks to go further than other similar existing tools by capturing details of different types of Balance, covering not only traditional card purchases, but also balance transfers and cash advances. Furthermore, it allows the user to clearly see the impact of paying just a little more than the minimum payment. These enhanced features will ensure that the indicative costs provided are as tailored to a customer’s individual circumstances as possible.”
Andrea Finney, Senior Research Fellow at the Personal Finance Research Centre, adds:”One of the most striking findings to come out of our research was how strongly the people we spoke to wanted to understand the costs of their credit card in relation to their own spending. A hypothetical balance, such as the one used for calculating the APR, simply wasn’t meaningful. This new website was developed to give users the opportunity to see the cost of their cards as a direct reflection of their actual balance and how they use their card.”
Mindful Money thinks this is all to the good of course. Now for a similar initiative from the payday lenders.