Sainsbury cuts credit card APR as RBS closes door to new customers
The credit card market saw two major moves today, as Royal Bank of Scotland closed its doors to new customers, but Sainsbury's widened its 0% deal and cut its APR.
Sainsbury announced today the 0% deal on its credit card will increase from three months to ten months.
The credit card also offers 0% for 12 months on purchases in the supermarket and 0% on balance transfers for 10 months, with a three per cent fee.
The firm has also cut the APR to 15.9 per cent - down one percentage point.
Data from moneysupermarket.com show the average length of the best five 0% purchases deals is 10.6 months and the average of the best five balance transfers is 14.8 months.
On balance transfers, Virgin Money is offering 16 months interest-free, Santander has 15 months, as does the NatWest Platinum card and Halifax has 13 months.
There are now 171 cards on the market with 0% introductory rates .
Sainsbury's rate of 15.9 per cent compares to Halifax's Easy Rate card at 8.9 per cent and the Barclaycard Platinum Simplicity card at 6.8 per cent.
A further development came from Royal Bank of Scotland announced it was closing its credit card doors to new customers.
Existing RBS customers - without or with a credit card - can still apply for the cards.
The move follows the market for personal loans, where the best rates are being kept for lenders own customers - simply because they can monitor a customers' risk profile more closely.
Louise Bond, personal finance expert at uSwitch.com, said: "This isn't the first time we've seen a credit card provider do this and I certainly don't think it will be the last.
"This move minimises the risk for RBS but at the same time it also limits consumer choice."
She added: "When a financial provider looks at the credit history of an existing customer they have a wide range of data available to assess the risk of the applicant.
"When it comes to new customers, they are often reliant on scant credit reports which do not reflect the day to day spending habits of the customer."
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