New Barclaycard “a responsible approach” says Moneyfacts

Financial advice group Moneyfacts has said that the new Barclaycard Flexi-Rate initiative has adopted a “responsible” approach towards lending, but says that it may not be beneficial to some borrowers.

Lisa Taylor of Moneyfacts said that the new card offering is “by no means the lowest on the market” but does give customers an element of control over the amount of interest they pay.

Borrowers who are prepared to pay ten per cent of their balance off every month will receive a rate of 9.9 per cent APR, which Moneyfacts states places Barclaycard as one of the top three standard rate cards.

Those who pay off the minimum amount of two per cent, however, could receive a “costly” interest rate of 16.9 per cent.

“It is a responsible approach in that it encourages consumers to repay their balances more quickly, rather than in many cases where people are using their credit card like a long-term loan facility, with monthly repayments equating to only two per cent of their outstanding balance,” Ms Taylor commented.

Moneyfacts notes that current levels of personal debt in the UK are in excess of £1 trillion and that such initiatives from financial providers should be seen as “a positive step”.