Experian has announced that it is introducing a “real rates” service to the credit card market so consumers will now know exactly what deal they’ll be getting. In a transformative change to the way consumers shop for credit cards, those using Experian’s comparison services will see the actual rate they’ll get when shopping for cards with certain providers.
Credit card and loan providers only need to offer their headline representative Annual Percentage Rate (APR) to a minimum 51% of customers that apply. The remaining 49% can be offered a different deal at a more expensive rate – and customers often won’t know what that is until they’ve completed an application, which will also leave a mark on their credit report.
The move will be a major boost to transparency in the credit card market and help consumers make more informed decisions about their finances.
Currently, two major credit card providers are signed-up to real rates with Experian, Virgin Money and Capital One, while customers, which are pre-approved for cards from Aqua, Marbles, Mbna and Barclaycard, will also see the rate they will get before applying.
The introduction of the service comes after Experian launched real rates for loans in May. Providers signed-up to offer real rates include Likely Loans, Zopa, Lendable, and Shawbrook. The move to boost transparency in the credit market comes after recent research from Shawbrook found that more than one in five (21%) consumers who successfully applied for a loan received a higher APR than the rate that was advertised, with the average difference of 2.4%.