Competition Commission orders store cards to display their costs

The Competition Commission (CC) has told store card providers that they should put warnings on their statements about the high levels of interest they charge.

The CC has recently conducted an investigation into store card practices, and says the inclusion of the warning would make it easier for borrowers to compare credit cards.

Statements should also feature information on late payment charges and the costs of only making the minimum monthly payment.

The CC has estimated that consumers are being overcharged £100 million every year due to store cards high interest rates.

“We are already seeing lenders improving their consumer offering,” a CC spokesman told the BBC. “Interest rates have already started to fall.

“When our changes come into force consumers will clearly see how much their store card debt is costing them.” The CC is expected to order firms to put the changes in place by the end of 2006.

Consumer groups have said that the ruling is a move in the right direction, but does not go far enough, saying that borrowers should be fully informed of all costs when they apply for the cards.

© Adfero Ltd

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