Summary

Some of the credit card industry's worse over-chargers have now been named and shamed by the Competition Commission. This article explains how some ( mortgage ) companies will be forced to change.

Credit Cards The industry is exposed for overcharging. Page 2

Author: Anna Richardson

We found that between 80% and 90% of store cards

have an interest rate of over 25%. And around 11.5 million customers hold these cards. Some retailers have already dropped their prices before the new rules were announced - of course they are still extortionate, (

) but slightly less so: Harvey Nichols has (

) dropped from 28.5% to 21.9%, and River Island and Monsoon have cut interest rates from 29.9% to 17.9% and 18.9% respectively.

The worst culprits are listed here for all to see - we call this the Table of Shame :

TJ Hughes 30.9%
Faith Card 30.9%
Owen & Owen 30.7%
Burtons 29.9%
Dorothy Perkins 29.9%
East 29.9%
Evans 29.9%
HMV 29.9%
JD Sports 29.9%
Kwik Fit 29.9%
La Senza 29.9%
Laura Ashley 29.9%
Miss Selfridge 29.9%
Russell & Bromley 29.9%
Ted baker 29.9%
Topshop/Topman 29.9%
Wallis 29.9%
Warehouse 29.9%
House of Frazer 29.3%
Bhs Gold Card 29.0%
Habitat 29.0%
Oasis 29.0%
Harrods 28.9%
Fenwicks 27.9%
Selfridges 27.6%
Bentalls 27.2%
Jaeger 27.1%
B&Q 26.8%
French Connection 26.8%
Argos 25.9%
Homebase 25.9%
New Look 25.9%

Note: There is an opportunity to pay lower interest rates by paying direct debit on some of these cards. The information was sourced from: Competition Commission/Moneyfacts 03/06

Most of the credit cards listed above are owned by large, multinational finance companies like GE Capital, the American conglomerate. The card operator and the retailer share the profits, and the retailer receives good incentives for achieving high debt thresholds. As a result, stores end up doing the hard sell on customers to persuade them to take a store card out.

John McFall, The Chairman of the House of Commons Treasury Committee, ( mortgage rates ) thinks that retailers care more now about profits than they do their customers, saying: "If you buy a suit from one of the stores then you would expect the retailer to ensure that it was well made and reasonably priced. These principles do not seem to apply to their store cards."

With a bit of luck, the moves made by the Competition Committee will help strike a better balance in the current store card/retailer situation.