Ex-credit card boss suggests 'wealth warnings' to avoid debt

FRIDAY, OCTOBER 13, 2006

The former head of Halifax Intelligent Finance credit cards, Jim Howarth, has suggested that all credit cards have "wealth warnings" on them to help their users avoid getting into uncontrollable debt.

Consumers, especially young people, are not informed enough about the sometimes exhorbitant rates of interest that they will have to pay on a credit card debt, according to Mr Spotswood.

However APACS, the UK payments association, disagreed with the need for wealth warnings, arguing that they are not needed and wouldn't have the desired effect anyway.

Spokesperson for APACS, Jemma Smith, said:"We definitely feel that they are not necessary. For a start a 'wealth warning' on your card would be so small as to be unreadable and therefore pointless."

"We would prefer that the industry collaboratively makes the lender aware of the need to borrow responsibly before they pull their card out of their wallet."

People are borrowing responsibly already, added Ms Smith.

Up to 59 per cent of cardholders pay off their credit card debt in full each month, according to APACS.

However, Lisa Taylor, spokeswoman for MoneyFacts.co.uk agreed with the need to include credit warnings on cards, as she said it is not "immediately obvious" how much interest people are paying.