Nationwide Building Society is to launch a credit card calculator on its Web site later this month, in a move that adds to the pressure on rival issuers over the transparency of charging schemes.
Nationwide's initiative comes the day after UK payments body Apacs unveiled an industry-standard summary box for card application and sales forms listing the annual percentage rate, minimum repayment, interest-free period and other charges. The move is designed to deflect criticism of the industry ahead of a parliamentary grilling of bank chiefs next week over the clairty of information available to consumers when they select a credit card.
Nationwide launched its own summary box earlier this month and is calling on the rest of the industry to follow its lead in providing users with a simple calculator which would show how much a card is likely to cost without relying on confusing and complex APIs.
Nationwide's chief executive, Philip Williamson says: "The new summary box will go a long way towards improving clarity for credit card users. However, this is an additional step we think the industry should now take. You wouldn't expect to buy a car without knowing how much it would cost you to run it - why should you be expected to do so with a credit card?"
The online calculator shows users how much Nationwide's credit cards will cost based on their typical spend and repayment habits and enables customers to see how changing their spending and repayment patterns can impact on the cost of using a card.
Nationwide believes the industry should do more to clear up consumer confusion over credit card charges by publishing examples of how much it would cost to clear a debt if the cardholder only made the minimum payment every month. The society says this should take the form of an online calculator which provides specific information and generic examples published alongside the summary box in all credit card literature
Says CEO Williamson: "As the level of credit card usage in the UK is set to rise, we believe it is essential for people to know how much their credit card costs them. By providing a clear indication of cost, this calculator will help our customers choose and use our cards in the most cost effective way."