Oliver Crawford

By Oliver Crawford

At Fairer Finance we assess the transparency of credit card providers as part of our biannual customer experience ratings.

In our Spring 2022 customer experience ratings, the Lloyds Banking Group (Halifax, Lloyds, Bank of Scotland and MBNA) did exceptionally well on transparency, taking four of the top five places in our transparency league table.

What can other providers learn from them?

Eligibility Checkers

First, all of the brands in the Lloyds Banking Group make good use of eligibility checkers.

A good eligibility checker should provide customers with the following information:

  • Whether or not their application will be accepted

  • The likely APR

  • If they're applying for a 0% card with a range of 0% periods, how long their interest-free period will be

  • If they're applying for a 0% balance transfer card with a range of balance transfer fees, what their balance transfer fee will be

Some eligibility checkers, like the one offered by Sainsbury’s Bank, don’t give clear answers on all of these points. This means that customers have to make a full application, which will leave a mark on their credit history, to know the details of their credit card offer.

Bank of Scotland, on the other hand, like other Lloyds Banking Group brands, tells customers whether they are ‘pre-approved’ or not, meaning they don’t have to make a speculative application that will leave a mark on their credit file to know if their application will be accepted.

Bank of Scotland's eligibility checker also specifies the likely balance transfer fee, APR, and interest-free period. This is good practice that should be adopted across the credit card sector.

Clarifying the terms of the promotional offer

A second area where the Lloyds Banking Group brands perform well is in explaining the terms of their promotional offers.

If credit card providers offer interest-free periods on balance transfers - as many of them do - they should make the following information clear:

  • The APR that will apply after the end of the interest-free period

  • The initial period that customers have to make a balance transfer if they want to get the promotional, interest-free rate

  • The consequences of failing to keep up with minimum repayments

Bank of Scotland - like its sister banks in the Lloyds Banking Group - clearly states the post-offer interest rate on the main product page.

They also clarify how long customers have to make the balance transfer and keep the promotional rate.

And they clearly explain the consequences of missing repayments.

Again, this is good practice that should be adopted across the sector.

Minimum repayments

A third area of transparency where the brands in the Lloyds Banking Group score well is on explaining minimum repayments.

Unlike some credit card providers, their summary boxes make it clear that customers should try to make more than the minimum repayments, because this means they will pay off their debt more quickly.

They also provide a worked example which shows how much longer it takes to repay credit card debt if you only make the minimum repayments.

This is useful information for customers. It would be even more beneficial if it were placed on the product page, rather than in the summary box where fewer people will read it.

Best Practice

As with all providers, there are areas of transparency where the brands in the Lloyds Banking Group could improve.

To give a few examples: it could be clarified whether foreign cash withdrawals charge both a cash transaction fee and a foreign transaction fee; the terms and conditions could be better signposted; and the website font size could be increased (Halfiax and Tesco Bank are models to follow on this last point).

Nonetheless, the credit card pages of Halifax, Lloyds, Bank of Scotland and MBNA offer several examples of best practice on transparency which other providers would do well to imitate.