Molière would turn in his grave

By Chris Pickles , Head of Marketing - Financial Markets & Wholesale Banking at BT
On 2009-08-11

I've proposed the idea that any consumer that pays for anything except by credit card has to be crazy. Credit card issuers offer incentives for using their cards, while banks typically offer no incentive at all. With airline credit cards offering you one "air-mile" for every £1 that you spend, other credit card companies offering you cash-back onI've proposed the idea that any consumer that pays for anything except by credit card has to be crazy. Credit card issuers offer every purchase that you make with a card, and telephone companies offering you a discount off your phone bill if you use their credit card

- why would you pay by any other means?

As long as you pay off the balance owing to the card company each month when you receive your account statement, of course. One thing that is fascinating on the internet "comparison web sites" is the interest rate that is charged - the "Average Percentage Rate" (APR). When I ask most credit card-holders if they know what percentage interest they would pay on their card purchases, they don't know. They don't look at that part of the card agreement, because they pay off the balance of their account regularly each month.

The amazing thing is how high the APR does go if you don't pay off that balance. In the UK (which of course is a non-euro country) most of the cards charge interest rates of around 16%, with some down around 12%. But the highest APR that I found was 51% - and that wasn't for a charge card (where the contract says that you have to pay it off each month).

When we studied French at school, I remember the lines from Molière's "L'Avare" (The Miser), when they were discussing how greedy the anti-hero of the play was. But even he only charged 30% interest!