Credit card companies have been told they should be more transparent about the rates of interest they charge consumers.
Current rules mean that credit card providers can advertise cheap APRs (annual percentage rates) while only offering the best rates to 51pc of customers. This means up to 49pc of customers are paying more for their credit card than they expected when they applied.
In an attempt to increase transparency in the sector, credit scoring agency Experian has launched a comparison service that details the real rate that customers will be charged before they apply for a card.
Andrew Hagger of Moneycomms, a personal finance researcher, said the current rules were unfair for consumers.
“It’s always been a bit of a lottery for customers when they apply for a credit card as they never know what interest rate they will be offered until the application process is complete and a mark left on their credit record," he said.
“The representative APR quoted is only a rough guide and often bears little resemblance to the rate a customer is granted.”
Experian said consumers were often unaware of what interest rate they had been offered until after the application process was completed, something which would leave a mark on their credit file and could potentially affect their credit score in future.
On its own comparison service, providers are required to list the actual rate they are offering consumers before the start of the application process. However, not all providers have been willing to sign up.
Aqua, Barclaycard, Capital One, Marbles, MBNA and Virgin Money are the card companies who will offer guaranteed rates to customers through Experian.
“Hopefully this much needed transparency will soon become the norm within the credit card industry,” Mr Hagger added.