Rate lowered on Barclaycard's flexi-rate product

October 6, 2006

Barclaycard's flexi-rate product, which offers a lower interest rate to customers who pay off a higher proportion of their balance every month, is reducing its standard annual rate and offering a new balance transfer (BT) deal.

The card's standard APR has been reduced by two per cent to 14.9 per cent and balance transfers are now available at nought per cent for 12 months with a fee of 2.5 per cent of the amount transferred.

According to Barclaycard, its flexi-rate initiative is encouraging customers to borrow responsibly and save some money. These changes will also make it easier for cardholders to switch from other providers, Barclaycard claims.

The company estimated that flexi-rate has made customers twice as likely to repay more than ten per cent of their balance every month, effectively reducing their interest rate to 9.9 per cent.

"We are delighted that flexi-rate is continuing to change the way cardholders manage their borrowing. It is clear from our findings that using a card in this way has a positive effect on borrowing costs," said Amer Sajed, managing director of Barclaycard UK Cards.

"By opting to manage their debts more responsibly, customers are rewarded by paying less interest and having the time taken to clear their balance reduced."