File(s) not publicly available
An essay on the inadequacy of APR as a measure of the cost of consumer credit, and why consumer credit legislation should be revised
journal contribution
posted on 2023-06-08, 05:42 authored by Mike OsborneThis article maintains annual percentage rate (APR) is not the best measure of loan cost and therefore its central role in consumer credit legislation should end. Legislation in many countries is based on the US Truth-in-Lending Act. The legislation is complex because APR is designated the best measure of cost. Research shows consumers find APR confusing and prefer a simpler measure, the finance charge. Conventional analysis argues APR is the best measure and should retain its key role. In this article, mathematical arguments are deployed to challenge conventional analysis by demonstrating APR is an inadequate and misleading measure of loan cost.
History
Publication status
- Published
Journal
SSRNPublisher
SSRNExternal DOI
Department affiliated with
- Business and Management Publications
Full text available
- No
Peer reviewed?
- Yes
Legacy Posted Date
2013-04-24Usage metrics
Categories
No categories selectedKeywords
Licence
Exports
RefWorks
BibTeX
Ref. manager
Endnote
DataCite
NLM
DC