How guaranteed rates for credit cards will help boost transparency

Often the credit card interest rate you see is different to the one you get. But things are changing.

Applying for credit cards can be a minefield. Often the interest rate you’re offered at the end is completely different to the one you see advertised at the beginning. But things are about to change.

With Experian’s new guaranteed rates, you’ll be able to see the Annual Percentage Rate (APR) you’ll get before applying for cards from selected lenders.

Currently, credit card providers only need to offer their headline APR – the interest rate they advertise for a card - to a minimum of 51% of customers that apply.

That means the remaining 49% can be offered a different deal at a more expensive rate. Customers often won’t know what that is until they’ve completed an application, which will also leave a mark on their credit report.

However, if you see Guaranteed APR, then it means the rate you see is the rate you’ll get before you apply. The guaranteed rate includes the APR, balance transfer and purchase rates if available. The cards will be displayed in order of eligibility – from the credit card you are most likely to be accepted for to the least likely.

This can help you make better financial decisions, as well as boost transparency in the credit card market.

Here are three ways comparing credit cards can help you:

  • Searching won't affect your credit score
  • See your chances of being accepted before you apply
  • The interest rate you see is the rate you’ll get

Currently, two major credit card providers are signed-up to guaranteed rates with Experian, Virgin Money and Capital One. Customers who are pre-approved for cards from Aqua, Marbles, MBNA and Barclaycard, will also see the rate they will get before applying.