UK Association: Credit Cards Need More Transparency

APACS, the UK payments association, has today launched a report highlighting steps that have been taken to provide clearer information to consumers when making borrowing decisions. The report has already been previewed at a reception in the House of Commons yesterday. Labeled, ‘Sharing Best Practice’ APACS has been working with banks and credit card companies to agree guidelines that can be used to enable more responsible lending.

Over the past year, APACS has helped introduce a number of initiatives which include: Making sure standard terminology is used in summary boxes. This will help consumers understand items like interest rates and charges more clearly.

Repeating the success of the summary box, introduced in 2003, by applying it to credit card checks. By the end of 2006 all credit card checks will include a summary box that will clearly state the higher APR rates and charges when a credit card checks is used. Launch of the industry’s Best Practice Guidelines. These guidelines have been developed by the industry and are already part of the Banking Code.

An agreement to share data within the industry. Banks and credit card companies have come under fire recently, being accused of irresponsible lending. By sharing information, card companies will have a clearer picture of a consumer?s financial status. The industry expects this data sharing initiative to begin in 2007.

Chief executive of APACS, Paul Smee, said, ?The past year has seen the credit card industry make significant progress on the transparency agenda. The results of our initiatives can be seen in recent data, which suggests cardholders are becoming more responsible in the way that they borrow – reining in their spending and focusing on repayments.?