Following a successful trial period, Barclays has announced the general release of its flexi-rate credit card from 24th October 2005.
University of Warwick carried out research into the innovative credit card format that aims to help people manage their debt by giving lower interest rates to those who pay off a higher proportion of their credit card balance each month.
Customers who pay off the minimum balance each month will be charged interest at 16.9 per cent whereas customers who clear more than ten per cent of their balance will be charged 9.9 per cent.
Researchers estimate the new card will enable 60 per cent of people to pay off more of their credit card balance more quickly.
Professor Henry Stott, of University of Warwick, said: “For some customers ñ particularly those that revolve a balance ñ flexi-rate would be a much better option than, for example, zero per cent offers where customers automatically pay higher rates following the offer period.”
The key to the card’s success is in encouraging borrowers to develop a sustainable attitude to debt management by changing their attitude to repayments.
Keith Coulter, managing director of Barclaycard UK cards and loans, commented: “Flexi-rate puts the consumer back in control and planning for the long term rather than putting off a decision to tackle their debt.”
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