press release

• Card firms taking advantage of consumer ignorance over interest free days
• Moneynet calls for greater clarity from providers

CONFUSION surrounding the small print on credit card agreements is leaving card holders in the dark when it comes to paying bills on time, according to new evidence from online financial data provider Moneynet(www.moneynet.co.uk).

Moneynet argues that wide variations between plastic providers in the length of interest free time allowable on their cards* (see table) has created confusion among consumers.

The end result, warns Moneynet, is that card firms are boosting their profits while prudent card holders are being penalised.

“The recent decision by some major card firms to slash interest free periods is bound to prompt rival card firms to follow suit,” said Moneynet chief executive Richard Brown.

“The majority of adults now carry at least two credit cards and an average of one store card, and with different clauses surrounding interest free days from card to card, it’s no wonder that people are in danger of being caught out.”

Prudent card holders who want to clear their debt typically have up to 56 days grace in which to do so. But by reducing this ‘free’ time, credit card companies are more likely to be able to drive up profits.

Moneynet also reports mounting anecdotal evidence of its users being caught out by varying rules between card companies.

“One issue is precisely when an interest free period begins and ends,” argues Brown.

“There is not an interest free period on purchases with the majority of cards, for example, if the monthly balance is not cleared in full and on time. But in our view card firms do not make this clear enough. In addition, the fact that some companies charge interest from the date of purchase whilst others are charging from the date the transaction is charged to the account only adds to the confusion.

“Part of the problem is that there is so much crucial detail buried in the small print - we’d like to see a standardised warning printed on credit card statements detailing in the simplest possible terms what interest free privileges card holders enjoy. And what kind of financial penalties they can expect if they do not clear their balance every month.”