RBS and its subsidiary NatWest are to stop offering 0% balance transfer credit cards to new customers, as it announces the launch of its new Clear Rate Platinum Credit Card.
The withdrawal follows the announcement in February by RBS CEO, Ross McEwan, of the bank’s intention to earn customers trust by no longer offering teaser rates and trapping people in debt they cannot afford.
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RBS claims the average 0% balance transfer card holder has £9000 ($15,000) on multiple cards, and does not pay down that debt over a 0% period.
Credit card market data shows that two thirds don’t switch their 0% card before they hit a payment wall and often their rates rise to over 20%.
RBS say these customers are also often paying a purchase rate of around 18% for the period, which they claim does not help them manage their debt down over time.
The Clear Rate Platinum Credit Card launched by RBS and NatWest has one rate of 6.9% for transferred balances and new purchases, with an annual fee of £24.
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By GlobalDataMoray McDonald, interim head of products and marketing, said: "The credit cards industry is absolutely dominated by teaser rates, trapping people in to a spiral of debt that never pay down; it’s not good for our customers, and it will play no future part in this bank.
"Removing these teaser rate debt traps and launching a new transparent, low rate credit card will be a big step towards earning back our customers trust," she added.
Related to:
Sainsbury’s to offer lowest rate credit card on the UK market
American Express to launch new credit card EveryDay
