In an OFT-commissioned survey, nearly 2000 credit card users were quizzed. Small print in ads got the thumbs down, whilst a summary box of key facts got the thumbs up. For more on the OFT report go to For more on the OFT report go to
Topic: Credit advertising
Who: The Office Fair Trading
Where: London
When: March 2004
What happened:
The Office of Fair Trading published the results of a "Credit card survey" based on interviews with 1,890 adults between 15 and 31 December 2003 and discussions with four focus groups in January 2004. The report is designed to shed light on credit card penetration and usage and explore understanding of credit card offers.
Three offers compared
Perhaps surprisingly, the report has very little to say about current attitudes to credit card advertising as such, although one interesting exercise consisted of showing the survey respondents three different credit card offers and asking them which they thought was the best deal.
One was an offer accompanying a monthly bank statement offering the bank's own credit card, the second was based on a "cold" mail shot and the third was online.
Perhaps encouragingly, 43% correctly chose the online offer as the best deal. More disturbingly, 11% thought they were all the same, 12% did not know and most of the remainder chose one or the other of the less beneficial offers. It was also clear that the provided information about the credit card offer was only given a cursory glance, with the decision based almost exclusively on the first few lines, focusing on the interest rate and the balance transfer offer.
Key choice factors
This was consistent with the results of the survey as a whole, which indicated that whilst people regarded the interest rate as extremely important, very few appeared to actually sit down and compare like for like offers side by side. Of the "choice factors" tested, the interest rate was mentioned by the largest proportion of holders, almost half at 47%. The brand name and reputation of the company issuing the card was a key factor mentioned by 4 in 10, 1 in 5 did not so much chose their card as have it issued to them when they opened their bank account while 18% mentioned points/reward schemes as a motivating force.
Summary box
Perhaps of most interest to credit card advertisers in the report is its focus on a proposed "summary box" of key information to go on marketing literature. This was proposed a few months ago by credit card issuers, as reported on marketinglaw.co.uk, and is due for introduction round about now.
In the survey, the reaction to this proposal was very positive. 89% said that they would find such a box useful and particularly younger respondents and the less financially aware seemed to find it provided reassurance and clarity. Another strong reaction was that the format should be consistent across companies and between promotional literature and monthly statements, and that the box should err on the side of simplicity rather than more detail.
Based on respondent comments, the report suggests what the OFT would regard as an ideal "summary box", which turned out to be very close to the original credit card company's suggestion. The information fields are APRs and other rates, monthly rates (as few as possible!), additional charges, minimum repayment, annual fee, interest free period, period interest is charged over and credit limit.
Large font plea
Other pleas that came out of respondent comments were that the font should be as large as possible, that it should appear prominently and not relegated to small print at the back, that there should be consistent format across companies and across promotional material and monthly statements, that all wording should be in plain English and avoid financial jargon and that asterisks should be avoided where possible.
Why this matters:
The timing of the survey report is good from the point of view of the "summary box" initiative launched by the industry some months ago. It underlines the potential importance of this for warding off tighter statutory controls on credit card advertising. One negative side is that the summary box initiative mentioned in the report as starting March 2004 does not as we go to "press" appear to have started in earnest or been triggered with the publication of any guidelines from the industry. One assumes that such guidelines will be produced if there is to be broad adoption of the initiative.
