Credit Cards

Oral Answers to Questions — National Finance – in the House of Commons at 12:00 am on 22nd February 1973.

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Photo of Mr Robert Taylor Mr Robert Taylor , Croydon North West 12:00 am, 22nd February 1973

asked the Chancellor of the Exchequer whether he has given further consideration to the inflationary implications of the unsolicited distribution of credit cards; and if he will make a statement.

Photo of Mr John Nott Mr John Nott , St Ives

I am not convinced that the unsolicited distribution of credit cards has had inflationary implications. However, restrictions on this method of distribution are being considered as part of proposed consumer legislation.

Photo of Mr Robert Taylor Mr Robert Taylor , Croydon North West

Some hon. Members would disagree with the first part of that reply. There would seem to be a good case for the introduction of stamp duty on credit cards, which would have the effect of making unsolicited cards invalid and also provide a useful source of added revenue. Will my hon. Friend consider that suggestion?

Photo of Mr John Nott Mr John Nott , St Ives

I have noted my hon. Friend's suggestion, but the need for banks to observe the 12½ per cent. minimum reserve ratio and to respond to calls for special deposits means that credit card facilities must be largely at the expense of other forms of credit. The amount of credit involved with credit cards is very small in relation to total bank lending, in any event.

Photo of Dr John Gilbert Dr John Gilbert , Dudley

I am glad to have the hon. Gentleman's acknowledgement that credit card credit will be at the expense of other credit. In the Government's plans to fight inflation, will they give due publicity to the fact that credit under instalment schemes of these credit cards is much more expensive than ordinary bank credit?

Photo of Mr John Nott Mr John Nott , St Ives

The hon. Gentleman is referring to the rate of interest on an annual basis as opposed to the rate of Interest being expressed in another way. His point is well recognised. I am sure that this kind of matter should be given wide publicity.

Photo of Mr Paul Rose Mr Paul Rose , Manchester, Blackley

Has the Chancellor any figures at his disposal about the amount spent on National Westminster Bank Access cards, where the sums expended were not backed by amounts deposited with the bank? How many cases of fraudulent use of these cards have there been, since they are to be used only by the authorised signatories, yet they were sent out without any signatures upon them? What has been the additional cost to other users of that bank by reason of those cards being sent out unsolicited and being used?

Photo of Mr John Nott Mr John Nott , St Ives

This is a matter between the bank and its customers. It is not for me.