Tuesday, November 17, 1998 Published at 13:47 GMT
Business: Your Money
Barclaycard slashes interest rates
Competition is growing in the credit card market
Barclaycard has slashed interest rates for customers to boost its share of the increasingly competitive credit card market.
Callers to Barclaycard have been offered rates as low as 9.9% on balances transferred from rival cards.
This is half the standard rate of 18.9% that it has previously charged for transfers.
This move follows last week's announcement that the credit card provider is cutting standard interest rates by 1% following the recent cut in base rates - the first credit card to move its rates after the Bank of England's cuts.
But over the last four years the credit card market has become more competitive with a number of new American banks entering the market with "no frills" aggressive rates.
A spokeswoman for Barclaycard said there was no specific marketing campaign, but these rates were being offered to existing customers who held other credit cards in an effort to lure them away from rivals.
As well as the 9.9% rate a 12.9% rate which will be held for a year is also being tested.
The spokeswoman said the rates would only be on offer for a limited period.
Barclaycard currently charges interest rates of up to 20.9% as a standard rate but has faced increasing competition from newer American competitors.
Banks such as Capital One and People's Bank now offer introductory rates as low as 6.9%, with the former offering standard rates of just 12.9%.
Barclaycard has clearly felt the pinch of this competition, announcing in September over 1,000 job losses over the next three years.
Competition in the sector has also hit the other high street banks. Midland Bank recently announced that it was lowering interest rates for "certain" existing customers who have threatened to defect to newer players in the market.
A spokeswoman confirmed that more than 43,000 Midland customers have seen interest rates on their credit card cut from 21.9% to 17.9%.
However, she said the bank was currently reviewing the interest rates charged on credit cards and a reduction was imminent.
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