Credit card providers disguise their charges to such an extent that consumers find it impossible to work out which card is the cheapest, consumer body Which? said on Thursday. Which? said its own research showed cards with higher annual percentage rates (APRs) could be cheaper than those with more competitive rates depending on how many days’ interest they applied. While many cards applied interest from the date of purchase, others waited a few days and only started applying the interest from the date the card provider actually paid the retailer. Which? said, in this way, Cahoot’s card, which charged 11.8% APR could work out more expensive than HSBC’s card that charged 13.9%.

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“It’s ludicrous that a card with a lower interest rate can cost more than one with a higher rate,” Which? editor Malcolm Coles said in a statement. “We want the credit card industry to use one standard way to charge interest so consumers really can choose the cheapest card.” The Card Payment Association, APACS, said consumers were able to compare the true cost of their credit by looking at the summary box, which all providers were now obliged to publish. Summary boxes were not only on marketing literature but should also be available as Internet links from financial comparison websites.


APACS spokeswoman Sandra Quinn said if providers standardised the number of days where interest charges were applied, that would affect the length of an interest-free period as the two were inextricably linked. “Most card users -56% - always pay off their balance in full each month and the vast majority of the rest do so most of the time. What’s important to them is the length of the interest-free period,” Quinn said. At the moment, people who buy goods on their credit cards get between 45 and 56 days to pay that amount off in full before they are charged interest. If they don’t, the issuer then applies interest, dated back to when the purchase was made or when the card provider paid the merchant.