Card launched for consumers with lower credit scores

| February 23, 2012
Card launched for consumers with lower credit scores

Capital One has launched a credit card suitable for customers whose credit score has been adversely affected by previous CCJs or defaults.

The ‘Balance’ credit card offers 0% on balance transfers until October 2012, the transfer fee is just 1.7 per cent and there is no annual fee.

It provides a small, manageable credit limit and could give borrowers welcome time to clear their debt without incurring further charges.

However, at the end of the six-month interest-free period, the APR is a hefty 34.9 per cent, which would make clearing any remaining debt very expensive.

Customers can add three extra card holders to their account, and will receive free purchase protection insurance and identity theft assistance.

Michael Woodburn, Chief Marketing Officer at Capital One said, “Balance Transfer offers have typically been targeted at customer with perfect credit ratings.

“Capital One has created a balance transfer for people who wouldn’t normally be accepted for this type of product.

Our new offering was developed in response to industry calls and we believe that it is a great offer for those with a sub-optimal credit history, who have existing debts that they want to move to a lower interest rate.”

Halifax has launched a new balance transfer credit card earlier this month, which offers a 2.9 per cent rate for 16 months, with no balance transfer fee.

At the end of the introductory 16 months the ‘Clarity’ card offers a reasonable APR of 12.9% (variable).

Halifax customers who have their main account with the bank can earn £5 cash back a month if they £300 on the Clarity Card during this period.

The Clarity is also available to customers who do not have a Halifax current account, but the cash back offer is not available.

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