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Are new credit card laws detrimental to consumers?
The new Consumer Credit Directive which aims to make credit cards more transparent and easy to compare between deals could have a detrimental effect on consumer borrowing.
Andrew Hagger from Moneynet told the BBC Wake Up to Money Show podcast that the law means that credit card companies can charge higher rates and extend the number of nought per cent deals.
"You can get up to 20 months now on nought per cent but that's only because they're able to make more money, because they're charging more," he said, stating that 15 per cent more borrowers are being moved to higher deals.
However, the UK credit card market is still extremely competitive, Mr Hagger explained.
"If you see one company bring out a deal of 20 months interest free then all the others follow. You get 18 months from one, 17 from others."
This could then allow savvy consumers to switch to better deals as they come onto the market.
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Andrew Hagger from Moneynet told the BBC Wake Up to Money Show podcast that the law means that credit card companies can charge higher rates and extend the number of nought per cent deals.
"You can get up to 20 months now on nought per cent but that's only because they're able to make more money, because they're charging more," he said, stating that 15 per cent more borrowers are being moved to higher deals.
However, the UK credit card market is still extremely competitive, Mr Hagger explained.
"If you see one company bring out a deal of 20 months interest free then all the others follow. You get 18 months from one, 17 from others."
This could then allow savvy consumers to switch to better deals as they come onto the market.
Copyright
Published: 03/06/2011
The information in this article was correct at the time of publication and contains time sensitive data and links, it may not be accurate at the time of reading.