Credit Card Interest Rates At 12 Year High As MBNA Launch Low Rate Deal
Filed under: General — admin @ 9:12 am
Despite the UK taxpayer bailing out most of the UK banks, borrowing money through a loan or credit card has never been so expensive with rates averaging 36 times the base rate. In such a climate, it’s hard to see how calls for ‘smarter lending’ by Government and debt charities can be met by lenders. But one credit card provider has recently released a card that offers users a lifetime low rate for their balance transfers, the lender is MBNA and the card, unsurprisingly,
is called the ‘Rate for Life’ card.
The credit card, which is only available online, is a standout offering in a marketplace full of limited 0% offers and high standard APR’s and comes with a 5.9% interest rate and 1.5% balance transfer fee. However, Chief Marketing Officer at MBNA, Greg Reed insists that it was their customers that encouraged them to create the card: “We have listened hard to what customers want and I believe that this simplified, easy-to-understand, low rate card will have enormous appeal to customers.”
No doubt MBNA will be targeting the portion of the 30 million strong UK credit card holders that are tired of switching provider every 12 months and constantly worry whether their credit rating will be good enough to get a new 0% deal. But the ‘Rate for Life card’ will have to compete with some strong opposition and fellow card providers have realized that it’s not necessarily the rates that are the main deciding factor.
More and more affinity cards are emerging in the market place, such as MBNA’s own football credit cards and charity cards, that use the reputation and emotion connections of well-known brands encourage those seeking a new card to sign up. Whether the ‘Rate for Life’ card can persuade card-holders to transfer their balance to a longer lasting deal is unknown, but with more people than ever before looking for low interest rates to manage debt rather than make purchases, a lifetime 5.9% could be an attractive proposition.
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