The man behind Standard Life Bank and Intelligent Finance has called for credit cards to carry cigarette packet-style warnings to help advise customers about repayment costs.
According to press reports, Jim Spowart, who set up both Standard Life Bank and Intelligent Finance, has told UK chancellor Gordon Brown that he believes all cards with interest rates 10% higher than the Bank of England’s base lending rate should come with labels to warn customers of the high repayment costs.
Credit cards are an essential part of our everyday lives but some of the current rates are usury and there is no justification for this other than pure banking greed, Mr Spowart said in a statement on his price comparison site Peopleschampion.com. What we need is legislation in the UK which would insist that lenders highlight the fact that they are charging 200% about the Bank of England’s base rate.
Furthermore, he said that Peopleschampion.com will be launching a campaign to highlight the worst offenders.
However, a spokesperson for HBOS has stated that the rate warning proposal is not a good idea, and is quoted by AOL Money as stating, There isn’t really a natural link between credit card rates and bank base rates – it’s a different sort of borrowing and credit cards are assessed differently.