10th November 2014
Lloyds Bank has launched what it has labeled a “market leading low interest rate credit card”.
The new deal, which is available online only, offers a purchase and balance transfer rate of 6.45% and carries no annual fee. It also offers no balance transfer fees for the first 90 days after which a 3% charge will apply.
According to Lloyds, a customer spending £2,000 on a card charging 18.9% APR, would save £392 over three years by switching to its new product.
Mark Powys, of Lloyds Bank credit cards, said: “We know that some customers find an ongoing lower rate of interest helpful to manage their finances – whether that is spreading the cost of purchases or transferring existing balances. We have added the Low Interest Rate Card to our credit card range to better serve those customers.”
Commenting on Lloyds’ latest salvo, Andrew Hagger of Moneycomms.co.uk pointed out that borrowers who are accepted for the Lloyds Bank new deal but have a less than perfect credit score may be still be offered the card but at a higher interest rate of 10.9% or 14.9%.
He says: “The card looks as if it has been strategically priced to sit at the top of the low rate best buys, just edging out MBNA at 6.6% APR and Sainsbury’s Bank at 6.9% APR. The crucial differences between the Lloyds Bank and MBNA card aren’t about the interest rate, but more around the greater flexibility that the latter deal offers to borrowers.”
Hagger explains that with Lloyds customers are restricted to transferring balances between different cards and “with a wide range of 0% deals…the Lloyds deal doesn’t look over appealing”
He adds: “Where the MBNA version has a big advantage is that it enables you to transfer the money to your bank account (via Money Transfer) without a fee, which gives customers the chance to repay expensive small personal loans and overdraft borrowing, both of which can charge APRs well into double figures and in some instances approaching 20% APR. It makes it a financially savvy choice for debt consolidation as long as your credit record is in good nick.”
Best buy low APR cards by APR: