New rules for lenders offering personal loans and credit cards come into force today. The Consumer Credit Directive will mean lenders will have to be more transparent when advertising their deals and processing applications. But at the same time, providers will now be able to advertise interest rates only offered to 51% of their customers when previously it was a minimum of two thirds.

Industry expert, Tim Moss from Moneysupermarket offers his take on the changes.

The first question is whether this is good news for consumers or not?

Tim Moss believes "It's got to be a backward step at a time when consumer confidence is at an all-time low and people are worried about taking credit. After what's happened over the last couple of years, it's made people nervous. This is a backward step. It's like walking up to a car dealership and the car dealer only offering the same price on the screen to 50% of people, we really are going backwards at a time when we need to be creating greater transparency."

The changes are as a result of a pan-European rule which brings the whole of Europe into line regarding how they advertise credit.

Tim Moss thinks that some of the changes are good and comments "people are being effectively told in a clearer fashion exactly what they're about to take on. So when you get your documentation it's highlighted better exactly how much that credit is going to cost you. Let's face it, after what's happened recently that's got to be a good thing. However, it's this backward step regarding who's going to get what prices that really, really isn't good for consumers. Europe hasn't had a standard, so Europe's gone from nothing to 51% and what they were saying was it was too far a jump to take them to 66% where we were already sat so we've gone backwards to 51%. It's just madness.

So is the likely outcome of the changes going to be that if you're OK with your credit rating you get what's advertised and if you're not you'll get whacked?

Tim Moss responds by saying: "That's absolutely it. I mean they never give you a lower rate, let's just state that, so it's about those other 49% of people, previously 34% of people, who are given another price based on exactly what the banks see in their credit record."

But at the same time, aren't these finance companies doing more? Are they being forced to make more credit checks? I mean that must be a good thing if that's the case?

Tim Moss believes "The actual level of the credit checking isn't changing. It just allows them to reprice those people who they feel fall outside of what they term 'the best customer' to be able to give them another price. So you know when we're 66%, 34% of people were shopping around and not able to get the prices they wanted and now it's 49% at a time when we can ill afford high cost of credit it's just a huge backward step that we really shouldn't be taking."

What will be the repercussions from this? Will less people be taking up loans? Will less people be applying for loans?

Tim Moss comments: "I don't see the demand actually changing, and to be honest the man on the street probably doesn't understand the difference between a typical APR and what has now become a representative APR and so I can't see demand actually changing. Hopefully what will happen through this new rule is the fact we'll have better documentation so it will tell customers if they borrow £5,000, they will pay back £7,500 and it will cost you £2,500. So it will make people think long and hard about taking out credit. You know, we've been accused of being frivolous with credit in the past and maybe this will focus the mind and actually only make people who need the credit take it rather than buying unnecessary things so from that point of view it's a good thing."