Launch of site to help consumers understand credit card repayments and those difficult APR calculations

26th June 2013

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This is certainly an interesting development from the trade body which represents the UK’s credit card companies, the UK Cards Association. It has launched a website to help consumers struggling to get their heads around what they owe and the APR calculation in particular work out what it will cost them in real terms.

Such a move is to be applauded. The site is at www.cardcosts.org.uk. The new online tool was created following a research project undertaken by the very well respected Personal Finance Research Centre (PFRC) at the University of Bristol.

The UK Cards Association says the CardCosts website will allow credit cardholders to:

・ Gain a better understanding of the cost of their current repayment choices
・ Experiment with different levels of payments and desired periods to pay off a balance
・ Learn from a range of informative messages which explain what can be complicated terms
・ Link to other help and guidance, such as credit card statements and summary boxes and
・ Quickly receive details of sources of free independent debt advice.

That is a pretty ambition list but as we say if it helps a knowledge shortfall or even marginally cuts back the numbers getting into debt problems it will be good news.

The chair of the association Melanie Johnson, a former Labour MP who had a stint as minister for competition and consumers, says: “The website looks to go further than other similar existing tools by capturing details of different types of Balance, covering not only traditional card purchases, but also balance transfers and cash advances. Furthermore, it allows the user to clearly see the impact of paying just a little more than the minimum payment. These enhanced features will ensure that the indicative costs provided are as tailored to a customer’s individual circumstances as possible.”

Andrea Finney, Senior Research Fellow at the Personal Finance Research Centre, adds:”One of the most striking findings to come out of our research was how strongly the people we spoke to wanted to understand the costs of their credit card in relation to their own spending. A hypothetical balance, such as the one used for calculating the APR, simply wasn’t meaningful. This new website was developed to give users the opportunity to see the cost of their cards as a direct reflection of their actual balance and how they use their card.”

Mindful Money thinks this is all to the good of course. Now for a similar initiative from the payday lenders.

14 thoughts on “Launch of site to help consumers understand credit card repayments and those difficult APR calculations”

  1. Paul C says:

    Hi Shaun,
    I am pleased you mention Switzerland because I go there regularly and have seen no change whatsover in their premium cossetted life, it is so nice there, cows, cheese, watches & chocloate, full employment, mountains and federated democracy.
    There is as you point out an implied criticism in their so called independent neutrality and the purchase of €390bn, they are a significant player in the pepertuation of this sick Eurozone, I guess their population doesn’t know it or tacitly agrees as long as toblerones get exported.
    Thankfully since they are “in it” to the hilt then they will also “cop it” when things explode, if that ever happens.
    The number of international organisations and EMEA head offices that operate out of this central part of Western Europe will together have a great influence in ensuring that the status quo is maintained.
    Don’t look to the Swiss for leadership.

    1. Anonymous says:

      Hi Paul C

      Switzerland has been a relative oasis of calm in the credit crunch era. Even the surge in the Swiss Franc did not harm its economic prospects too much. But the price has been and indeed is being paid in the Euro area.

      One oddity of all this would be if the Swiss France stayed closed to 1.20 versus the Euro over the coming years and in effect gave it a fixed exchange-rate with the Euro.

  2. digger says:

    Central banks buying equities as worldwide equities hit $66 trillion and S&P 500 at 2000.Can’t see that going wrong.

    The Swiss are the ultimate peacenik hypocrites and therefore the best custodians of safety deposit boxes.

    1. Anonymous says:

      Hi Digger

      It is the other “currency twin” the Bank of Japan which is the other major central bank which has advanced into holding equities and in its case real estate investments too. But as time passes the fear is that other central banks will play follow my leader.

      As to their skill well the Bank of England was far from alone selling gold near to its low a decade and a bit ago. These days with gold prices high then central banks have mostly been buyers. How does that work out?

  3. Forbin says:

    ” …. Switzerland itself. It faces the possibility of being an enormous hedge fund with an attached country and population…..”

    like Ireland , Iceland and Cyprus ?

    except more like Iceland , if it all goes Pete Tong they can just NOT bail out the Bankers…..

    What could go wrong ?

    Forbin

    PS : I believe they have still a functioning democracy , not an oligarchy like us and the Franco-German Empire……..

    1. Anonymous says:

      Hi Forbin

      Yes there is much to admire in their democratic system and its regular referenda. However the problem with casting their banking sector adrift is that Switzerland is so associated and intertwined with its banking sector.

      On the upside corn prices seem to be remaining low (-28% year on year).

  4. Anonymous says:

    I’m trying to assess the risks to the SNB.

    Sell CHF and buy OATs (French govt bonds) – the SNB could be throwing good money after bad.

    But if the SNB allowed the franc down to 1.14 for a day then intervened back to 1.20, all the bankers who bought at 1.14 have lost 5% in a day. I’ll just clean my desk and grab my coat on the way out …… I’d not want to bet against the SNB.

    Expanding the monetary base does not need to cause inflation, assuming that the additional money is being saved / used by foreigners in trade outside Switzerland. That would be a step towards reserve currency status.

    1. Anonymous says:

      Hi ExpatInBG

      I remember discussing a while ago rumours that the SNB had been making some substantial purchases of OATs and that they were not just short-term ones. Such a trade would have been very successful as I discussed only yesterday.

      I agree with your point about the monetary expansion which seems to have been sucked up by foreign demand.

      1. Anonymous says:

        “Such a move would have been very successful”, yes on paper today. But at the current yield, I’d be itching to sell and bank the profits. But it does beg the question where to put the cash next

  5. therrawbuzzin says:

    A landlocked country (no fishing grounds or tidal or wave power) of less than ten million souls, whose only national resource is snow, and whose exports consist of timepieces and dairy products, and no EU membership, has the hardest currency in Europe, and a GDP per capita of $86 000.
    Bigger is better :O

    1. Anonymous says:

      Hi therrawbuzzin

      I recall the example of Norway being raised in the Scottish independence debate, but do not recall the status of the Swiss being raised. Has it…?

  6. Eric says:

    Hi Shaun,
    Interesting stuff.

    In 1960 on my first visit to Switzerland as a tourist I got 12SFr/£.

    In 1997 on my last visit, while sipping very expensive coffee in Interlaken, I bemoaned an exchange rate of about 2SFr/£ to an elderly gentleman at the next table who said “Huh, when I first came here in 1936 I got 30 francs for my £.”
    Meanwhile the Swiss tourist industry was rapidly trying to learn Japanese.

    Today a British tourist will get less than 1.5 francs for a £. I often wonder how many British tourists still visit Switzerland.

    There seems no end to the rise of the Swiss Franc in spite of King Canute style attempts to hold it back.

  7. therrawbuzzin says:

    Well, the obvious choice for comparison is Norway, because of its similar natural resources, but there is some comparison with other smaller European countries:

    http://www.heraldscotland.com/politics/referendum-news/independent-scotland-would-be-higher-in-human-development-table-than-uk.24945600

    Independent Scotland ‘would be higher in human development table than UK’

    SCOTLAND would move higher up the world league table for human development if it became independent, while the rest of the UK would go backwards after a Yes vote, according to new research by a leading economic research body.

    SCOTLAND would move higher up the world league table for human development if it became independent, while the rest of the UK would go backwards after a Yes vote, according to new research by a leading economic research body.

    The report, The Success of Small Countries by the Credit Suisse Research Institute, found an independent Scotland would easily outperform the rump UK on the United Nation’s Human Development Index (HDI), which combines economic, education and health measurements.

    Catalonia would also outrank the rest of Spain on the HDI if it became independent.

    The report compares the performance of the world’s 109 small countries, with populations below 10 million, to that of the 85 countries with more than 10 million people.

    The report said the recent economic crisis showed the fragility of some small countries, with the “peak-to-trough falls in GDP from 2008 to 2014 being the most dramatic for the Baltic states, Iceland, Ireland and Portugal.” Sweden and Switzerland fared much better.

    But the report also identifies strengths seen in small countries, such as strong HDI.

    In the event of independence, it said: “Both Catalonia and Scotland will rank higher than Spain and the UK respectively. Catalonia would rank 20th globally, while Spain ranks currently 23rd and would slip to 26th ex-Catalonia.

    “Scotland would rank 23rd if we include a geographical allocation … related to North Sea oil output, versus the current 27th place for the UK and the hypothetical 30th for the UK ex-Scotland.

    “Note that even excluding any allocation of oil output, Scotland would still rank ahead of the UK, but just so.”

    The report also found small countries were strongest for “intangible infrastructure”, the political, legal and socio-economic factors which foster social and economic progress.

    These include political stability, strong institutions, rule of law, stable tax policies, research and development, and education. It said: “It seems excellence in intangible infrastructure is a small country speciality.”

    However, the report also suggests SNP plans to model Scotland on Nordic nations such as Norway would not be straightforward.

    Small countries such as Norway and Switzerland benefited from “vintage”, the report said, with stable institutions and good infrastructure.

    “Older, small countries, notably those in the alpine and Nordic regions, tend to be pinpointed as the model for other small nations to follow, though many of the factors that have contributed to the success of the alpine or Nordic countries are not transferable … Many of the ingredients that have contributed to one country’s success are very difficult to ‘cut and paste’ on to other nations.”

    Shortly before 2008 turned Iceland into an economic basketcase, Alex Salmond hailed it as part of an “arc or prosperity” with Ireland. The report says such praise can be a bad sign.

    “The designation of a particular country as a model for others to follow invariably marks the peak in that country’s (hubristic) growth. Iceland and Turkey are good recent examples.”

    SNP Finance Secretary John Swinney said: “This highlights once again that Scotland is perfectly positioned to flourish as an independent nation able to concentrate on our talents, grow our economy and build a better and fairer society.”

  8. Anonymous says:

    Hi Ian

    They could within their borders/jurisdiction but it would be impossible to police deals done abroad. Indeed it would probably drive deals abroad in a similar manner to the way that the Eurobond market developed.

    Actually you have reminded me that the whole Tobin tax issue has gone rather quiet for a while…

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