Competition has made dramatic progress in the world of personal finance in the last 18 months alone. The cost of insurance premiums on house and contents and motor insurance has fallen, partly because of the growth of telephone-based sales teams who cut out the cost of the high street office and the broker. Share dealing costs have also come down, although they should have further to fall.

Mortgage rates have come down faster than the level of base rates in the economy as a whole. Charges on many, but not all, personal equity plans have been reduced and in many cases the initial charges which swallow up to 5 per cent of the capital invested have been abolished altogether.

Now competition has begun to reach the credit card market with the introduction this week of the new Visa card operated byRoyal Bank of Scotland and the US-based Advanta. It offers users the normal free credit if they settle their debts in full by the due date each month, and although it levies a pounds 10 fee if you forget to pay something off your balance each month, it charges no annual fee and offers one of the lowest interest charges around, currently 14.88 per cent on unpaid balances compared with 22 or more per cent at other leading cards. Store cards typically charge even more, often 26-29 per cent.

Only a handful of niche cards like the Save & Prosper or Robert Fleming cards charge lower interest and they levy an annual fee.

The RBS Advantage interest rate is also unusual because the rate will be linked to base rates, unlike rates on most leading cards which are set by the providers and appear reluctant to budge when other rates of interest are coming down.

Credit cards have established a strong presence in the UK in the last 30 years with 28 million cards in use and almost pounds 12bn worth of credit outstanding. Almost 70 per cent of all credit card borrowing attracts interest. The card companies have blamed the need for high interest rates on the borrowers who repay in full each month and pay nothing for their credit, and also on heavy losses through fraudulent use of lost and stolen cards, which they seem reluctant to tackle by putting the users' portraits on the cards.

No one outside the card companies really knows, however, how profitable they are, and we shall not learn that from the new players either.

With any luck, however, competition will soon start to attack the pensions market, where arcane performance projections still make it difficult to choose a pension provider with any confidence and, even after the introduction of commission disclosure, purchasers still feel unsure they are doing the right thing.

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