Vir Cantium

I'm right, you know …

Shopping Around

Suppose you suspected that the place where you usually had your hair cut was overcharging. What would you do?

You might go down the road to the next hairdressers/barbers. Perhaps their prices were similar – unsurprising if they and the near neighbour were in competition and keeping an eye on each others’ rates.

A short distance away, you might find someone who’ll cut your hair for considerably less, so you go there instead (assuming you’re happy with the quality, customer service and all the non-financial factors that might go into the typical purchasing decision).

This, surely, is how most people would do things. Not, it seems if you are Dr Ros Altmann “former government adviser”. Her approach, it seems, would be to call on the government to launch an enquiry into the rates charged by hairdressers … or, to take another example, credit card companies:

A former government advisor has called for an investigation into the profit margins of credit card companies.

Ros Altmann says credit card rates of around 18% are excessive and argues there could be a case for a regulator to oversee the rates they charge.

Credit card customers are now paying the highest interest rates for 12 years, according to financial information service Moneyfacts.

This is despite the fact that base rates are at an all-time low of 0.5%.

The card companies say rates are high because of the large number of people failing to pay their bills during the recession.

Well, a quick glance at moneysupermarket reveals that there is a good selection of cards charging single figure rates, so it’s hardly a cartel operating here.

If a credit card rate is that critical to someone’s finances, then they need debt advice or help with their financial planning – not, potentially, more government regulation to save them from themselves.

Next thing you know, they’ll be suggesting that the credit crunch had nothing to do with people borrowing irresponsibly and that it was entirely the banks’ fault. Oh, wait….


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