The Royal Bank of Scotland was planning to introduce a cut-price credit card by the end of the year, but, due to the concerns regarding the £200bn of lending, ammased by UK households, their final decision was to postpone this, says The Guardian.
Currently, the bank considers that launching a more competitive credit card at a time when personal loans, car finances or credit cards are facing scrutiny from the Bank of England wouldn’t be the best decision.
Not happening in 2017
“We just don’t think now is the right time, with consumer debt having grown so much,” said Ross McEwan, RBS CEO, cited by the above-mentioned source.
The bank has been analyzing the possibility of returning to the cut-price credit card market, even though back in 2014 they announced that they will ignore deals on credit cards offering 0% interest rates.
However, the option has started being reconsidered, due to the smaller and smaller growth of the bank’s credit card’s business, including travel rewards cards or cash back credit cards.
RBS clients will surely benefit from this, in terms of credit score
Keeping it short, Mr. McEwan believes that the timing is just not adequate, so RBS will try implementing this idea in 2018.
Specifically, he is highly concerned about zero-balance transfers, which allow people to take out a new card in order to pay for an old one, with a 0% interest rate. This includes up-front fees, so customers did not always know they rate they moved on after the offer was ending, resulting in a surprise increase in borrowing costs.
Instead of waiting for these cards, RBS recommends clients to take advantage of the current low-interest environment, in order to pay back all their debts.
“I think financial institutions should be encouraging people to get their debts paid down and when you’re on zero balance that is the best time as it’s costing you nothing, said the same Ross McEwan.
In other news, the Royal Bank of Scotland recently announced a new personal contract purchase for its NatWest current account customers. This is known as one of the most common deal for anybody who is looking forward to buying a new car through a bank.
