Credit cards need 'wealth warnings'

11 October 2006
Market analysts are calling for "wealth warnings" to be placed on credit cards to caution users of the high interest rates involved and the consequences of maintaining a substantial debt on their plastic.

Jim Spowart, the former head of Halifax Intelligent Finance credit cards has suggested that clearer warnings are needed so that borrowers, especially the younger generation, are aware of the dangers of taking on too much credit.

Similarly, Lisa Taylor, a press officer for financial website MoneyFacts.co.uk, has echoed Mr Spowart's calls, noting that "it is not immediately obvious to people how much interest they are paying".

"I think they (credit card companies) could make things more transparent for the consumer," Ms Taylor said. "There are so many different variations in credit cards that it is difficult for the consumer to choose the right card."

Ms Taylor also said that while there was probably "just enough" information being provided by institutions over the fees associated with credit card products, frequently the warnings are "complex" and "not very consumer friendly".

"Consumers are bombarded with too much information that is not necessarily helpful," she added. "The information needs to be clear and obvious in language that consumers can understand."

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