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Consumers beware the credit card Christmas bonus
Added: (Tue Sep 27 2005)
CHRISTMAS could net credit card providers a windfall of around £600 million because consumers fail to shop around for their festive period credit.
This was the warning sent out today by the independent credit experts at checkmyfile.com.
Barry Stamp, Joint Managing Director of the credit reference website, said: “Many of us will be tempted by the credit card offers dropping through our letterboxes this autumn.”
“This is because a lot of people prefer to put their Christmas shopping on a new card, as there is more certainty there will be credit available, and some like to keep Christmas spending separate.”
“There is a tendency not always to shop around for the best deal, which could cost consumers dearly in unnecessarily expensive interest charges,” added Mr Stamp, a member of the Institute of Credit Management’s Technical Advisory Committee.* “At checkmyfile.com we are seeing many people paying interest rates averaging 3% more than their credit score can command.”
The average Christmas shopping spending by UK consumers in 2004 was around £500, mostly on credit cards. Based on this, the credit industry earned around £400 million from fees levied on retailers, and are set for windfall interest of £600m if consumers continue to fail to shop around.
The Christmas bonus will expand further if shopping on the Internet continues to grow at its current pace, as merchant fees for internet transactions tends to be higher than that for traditional retail outlets.
Mr Stamp said: “We recommend that if consumers need credit for Christmas spending, they shop around first to find the cheapest deal possible. They can do that by using our free credit score service on checkmyfile.com which matches credit deals to your credit score.”
Ends
Editors notes:
*The Institute of Credit Management Technical Advisory Committee provides feedback to Government consultation papers on credit matters.
Launched in 2000, checkmyfile.com is the UK’s first Internet based credit reference agency, aimed firmly at serving consumers. checkmyfile.com is fully independent and was the first in the UK to provide consumers with online access to their credit files, to offer consumers the ability to check their own credit score for free and to give plain English explanations of how credit scoring works. With over 1.1m registered customers and visited by over 20,000 unique new visitors every day, checkmyfile.com is ranked within the World’s top 50,000 websites.
For further press information please contact: Richard Goedegebuur at checkmyfile.com on 0207 193 6021 or email: richard.goedegebuur@checkmyfile.com
Credit Reporting Agency Limited – Registered Office 13 High Cross Truro Cornwall TR1 2AJ
Registered in England no 3719598