07 November 2016 10:51:45
|How will Barclaycard's interest drop affect UK bad credit?|
The market for credit cards for bad credit has been buoyant in 2016. New brands have entered the market, old brands have refreshed their products, and a steady stream of promotional offers have seen bad credit customer getting deals they could only have dreamed of (even a few years ago). But, one brand has been comparatively quiet.
Yes, their 'Initial card' has long been a favourite with people wanting to rebuild credit, but although they've tweaked their 0% purchase intro duration a couple of times, Barclaycard's appetite for bad credit customers seemed diminished.
On Friday (3rd Nov) that changed. Barclaycard's radical shift in the APR offered to the majority of customers (from 34.9% to 28.9%), shook the UK bad credit market, and reaffirmed their stated desire to serve different types of customers. Indeed, Barclaycard is now almost the only significant UK credit card supplier to offer market leading products at both ends of the credit market (their balance transfer product have long been known for being amongst the most competitive available).
Their interest rate change, together with the three months 0% purchases available, means that Barclaycard has given itself a considerable edge in the pre-Christmas credit market.
How the traditional bad credit suppliers will react is yet to be seen, but given the intensity of the competition, we may well see further moves before Christmas.
All in all, this is great news for customers, as the competitive forces unleashed are likely to see the APR's available to many of the poorest customers drop, at a time when increased inflation looks likely to bite them very hard.