Credit Card Issuers Target the Squeezed Middle

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As the UK continues to stumble through the economic doldrums, Barclaycard are responding to the changing personal finance needs of nation with innovative new near-prime products.

The Squeezed Middle

Squeezed Middle

These credit cards are likely to offer the responsible mass of the UK population a great tool to better weather the current financial storm.

There was a time before the credit crunch when the UK credit card landscape was easy to understand. Either an individual was a prime customer; able to access all of the best in class products, like balance transfers, long 0% purchase periods or cashback. Or they were a subprime customer, catered to by a one or two mainstream issuers and a number of specialist lenders.

Individuals who fell into the second category, more often than not, incurred high interest rates and low credit limits. They were offered few of incentives and benefits available to prime customers.

In a word, “us”. The British public has changed. As the credit crunch has bitten the British public more and more individuals once considered a good risk have defaulted and struggled with their debts. This has left credit card issuers, looking for prime customers, with an ever smaller pool to going fishing for customers in. Yes this has resulted in the longest balance transfer rates the UK market has ever seen, but credit card issuers need scale to operate successfully and that is where the near-prime credit card comes in.

Last week Barclaycard became the first UK issuer to launch credit cards products specifically designed to target UK personal finances’ squeezed middle. Those customers who demonstrate a responsible attitude to credit and who would, until recently, have been considered a good risk. The upside for customers, who have a good track record of payments, is that they can now access benefits they might not normal expect, like balance transfers (one of the Barclaycard near-prime products is offering a massive 18 months on balance transfers – which makes it competitive with some prime credit cards!) and rewards.

Critics will point to the fact that the near-prime cards do still have higher interest rates, than some would expect from leading products, and that’s true, but as Mark Scott,, argues, “...These credit cards are likely to offer the responsible mass of the UK population a great tool to better weather the current financial storm. They aren’t prime credit cards and shouldn’t be viewed that way, but they do give customers a straightforward road back re-establishing a good credit score. We think Barclaycard should be applauded for this great pro-customer move”.
_______ is one of the UK’s leading personal finance comparison websites. Based in Colchester, Essex, has been helping UK consumers get a better deal on credit cards, saving, loans and more for over five years.

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Mark Scott
Freedom Marketing Limited
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