British bank launches new credit card
A new-style credit card has been set up in the UK by Barclaycard which aims to reward consumers who pay off their balances quickly with lower interest rates.
The Repayment Rewards card links the interest rate customers are charged on their outstanding balance with the percentage of their debt they repay each month.
For example, someone who repays the minimum 2.5% of their balance one month will be charged interest of 16.9% on any outstanding debt they have two months later.
But someone who pays back between 5.05% and 9.99% of their balance will be charged interest at 12.9%, while someone who pays back more than 10% will only be charged 9.9% on their balance.
These rates compare with a typical APR of 15.9% on the Barclaycard Platinum card.
The card has already been trialled by a number of customers, and while there is not yet an official launch date planned, Barclaycard hopes to make it more widely available by the end of the year.
It is the second product the group has tested this year which aims to encourage consumers to manage their finances better.
In March it piloted Barclaycard Combinations, which was a credit card with a loan facility, that enabled customers who had built up a balance on their credit card to sweep the debt across to the loan, enabling them to benefit from lower interest rates and set repayment terms.
Keith Coulter, managing director of UK consumer cards and loans at Barclaycard, said: “Credit, used sensibly, can help us manage our finances and live the way we want to.
“Repayment Rewards is about finding new ways to help customers while encouraging a responsible approach to their borrowing.”
