Barclays criticised for promoting irresponsible spending
Barclays has been slammed for encouraging irresponsible spending by proposing to issue a trial version of a credit card with a limit of £25,000.
The card has been named the ‘Freedom’ credit card and is being advertised with the heading ‘If I see something I want, I need to be able to act quickly and not have to wait to arrange finance, or be stuck with a high rate of interest.’
Furthermore, the card charges a rate of 14.9% on any balance that is not paid by the end of the month. Outstanding balances on the card can be moved to a 6.6% loan facility after this if the customer agrees to pay off a set amount each month for any period from 3 months to 7 years.
The charity, Credit Action, which helps people manage debt, said the card encourages irresponsible spending and it may be that Barclays will benefit from the possibility that many customers will eventually forget to clear their balance each month or move it to the 6.6% loan facility.
As a result, a holder of this card would incur one of the highest interest rates on what could be considerable balances.
Consumer Action added that £25,000 is a huge sum of money and the percentage of people able to clear this sum each month is very low. It seems that this card is a crafty way for Barclays to get consumers to pay a higher rate of interest than on a regular loan.
It is believed that Barclaycard will make the card available exclusively through moneyexpert.com, the finance comparison website. A Barclaycard spokesperson would not divulge how many people are likely to participate in the trial or how long the offer period will run for.
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