The UK Cards Association responds to Which’s latest release
In their latest release dated 22 April, ‘Credit card tricks are no joke’, Which claims that various credit card issuers have changed their terms of use over the last 12 months, and failed to lower interest rates in line with the base rate.
Paul Rodford, Head of Policy, The UK Cards Association responds:
"UK consumers still enjoy an exceptional choice of credit cards, only last week moneynet.co.uk [1] reported that in comparison to personal loans there are several low rate credit card deals currently available. It’s a feature of our very competitive marketplace that card deals change all the time so there’s always a wide range of interest rates, cash back schemes and balance transfer deals to choose from: the most important thing for a customer is to choose the right credit card for the way they want to use it.
"Also, our latest statistics show that 6 out of 10 credit cardholders paid off their bill in full every month in 2008, and so would be completely unaffected by a change in APR or interest rate and have no need of balance transfer deals.
"Which’s latest report unfortunately also overlooks several other key facts: principally they erroneously suggest a direct link between the base rate and APR, which has never been the case. It’s a fact that the average APR has consistently dropped over the last fourteen years [2] often at times when the base rate has increased. The current average is still well beneath the 1995 peak of 22.9%. The APR is the total cost of credit and takes into account interest rates, fees and charges. It also reflects the risk of granting an open-ended line of unsecured credit and the possibility of bad debt in an increasingly uncertain economic climate."
ENDS
For further information contact the press office on 020 7711 6316
Notes to editors:
The UK Cards Association is a trade body that gives credit, debit and charge card issuers, and merchant acquiring banks a forum where they can work together on non-competitive issues. It was formed in April 2009 as the successor body to the APACS Card Payments Group.
[1] ‘Rates soar on personal loans’, Esther Shaw, Daily Express, 15 April 2009
[2] 1995 22.9%, 1997 22.7%, 1999 19.4%, 2001 17.9%, 2003 15.2%, 2005 16.2%, 2006 15.9%, 2007 15.2%, 2008 16.1%
