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Praise for new Flexi-Rate credit card

Fri, 21 Oct 2005

The launch of a new credit card, designed to help credit card holders manage their debt, has been praised by financial experts.

The fact that the new Barclaycard Flexi-Rate credit card gives the credit card holder the ability to control the interest rate they are charged, encourages a responsible approach to debt, says Andrew Hagger of financial website Moneyfacts.

With the new credit card, credit card holders are rewarded with a lower interest rate in return for a higher monthly payment on their credit card balance.

And even though this credit card does not offer the lowest interest rate on the market, it is a "responsible approach", Mr Hagger says, as it encourages credit card holders to repay their balances more quickly.

This is better than in existing cases where credit card holders use their plastic more like a long-term loan facility, with monthly repayments equating to only two per cent of their outstanding balance, he says.

"With personal debt levels in excess of one trillion pounds and a number of banks reporting increasing levels of bad debt, anything that encourages consumers to manage their money in a more responsible manner should be seen as a positive step," Mr Hagger concludes.

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