Barclaycard Ring: Are you smarter than a credit card executive?
A whole lot of people aren’t fans of the banking types who run credit card companies. Indeed, this very news blog once accused those executives (when banks again started giving cards to subprime borrowers) of lacking “a connection to reality greater than that of a goldfish on LSD.” Think you could do better? Well, here’s your chance.
Credit card that puts you in the boardroom
Barclaycard US has unveiled a new credit card that is going to allow customers to participate in key management decisions, including setting fees and credit card rates, and determining how services are delivered. The company also plans to pay a “dividend” to cardholders in the form of a profit share. In a press release, Paul Wilmore, Barclaycard US’s managing director for consumer markets, explained:
Through simple and transparent terms, we want to pull back the curtain that has traditionally separated banks from their customers and give our community a say in weighing economic tradeoffs that can create a better cardmember experience. Some might say we’re creating a virtual credit union or community bank, but we’re taking that model much further by giving our members a seat at the table to help decide what card features and benefits are really best for them.
You may already have spotted some weasel words. You stand to get only “a say.” And, of course, the company could discontinue both its “crowdsourcing” policy and its profit-sharing program at any time. So is this a revolutionary innovation or a marketing gimmick? It’s too early to say, but it’s hard not to welcome any attempt to improve the existing credit card model.
Rock-bottom credit card rates
The new product, the Barclaycard Ring MasterCard, is currently being tested, and won’t be generally available until the spring. However, one of its most enticing features has to be its ultra-low rate of 8 percent APR when credit card rates are, at the time of writing, averaging 16.99 percent APR.
The new product is also offering some other attractive features:
- Late fees capped at $25
- Cash advance fee capped at $1 per transaction
- Foreign transaction fees are a straight 1 percent
Wow! Low rates and low fees. That’s as revolutionary as the crowdsourcing idea. It’s safe to assume that you’d need an excellent credit score to get approved for this plastic. You should probably also assume that this isn’t a rewards credit card as Barclaycard make no mention of such a program.
Low interest credit cards vs. rewards credit cards
This blog has often made the point that it’s a good idea to have at least two credit cards, and to use them strategically. If you’re buying something that you know you’re going to pay for in full at the end of the billing cycle, use your rewards credit cards, and enjoy the points or cash back. However, if you plan to pay down the cost of your purchase over many months or even longer, it usually makes better financial sense to use one of your low interest credit cards.
As mentioned before, the Barclaycard Ring MasterCard isn’t yet generally available, but you might well want to apply for one when it is. Watch this space for news of its full launch in the spring.
Disclaimer:The information in this article is believed to be accurate as of the date it was written. Please keep in mind that credit card offers change frequently. Therefore, we cannot guarantee the accuracy of the information in this article. Reasonable efforts are made to maintain accurate information. See the online credit card application for full terms and conditions on offers and rewards. Please verify all terms and conditions of any credit card prior to applying.
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