Digital bank B launch new low-interest credit card

23 June 2017, 20:49   By Samantha Smith

CHALLENGER bank B have launched their first ever credit card, offering a low rate of 9.9% p.a. (variable), zero transfer charges and free overseas spending.

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Credit: PopTika/

The launch comes only 13 months after the app-based bank was launched by Clydesdale Bank and Yorkshire Bank, with their current and instant saving accounts offering interest rates of 0.25% AER and 0.5% AER respectively.

Now, they also have a credit card to their name, which in addition to low interest and zero transfers also comes with a handy app that tracks the customer's spending.

And while there are certain credit cards that offer lower long-term interest rates or more generous overseas spending perks, B's card may perhaps be one of the best for those who want a combination of benefits.

Low interest

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First of all, while an interest rate of 9.9% p.a. may not seem all that much compared to those cards which offer 0% interest for new holders, it should be underlined that the 9.9% rate isn't an introductory offer.

Rate of interestTotal amount of creditRepresentative
9.9% per annum (variable)£1,2009.9% APR (variable)

By comparison, the vast majority of cards that provide 0% interest to begin with sooner or later revert to on average a typical 18.9% p.a. rate, meaning that B's offering may be preferable for anyone who wants a no-fuss card they don't really have to worry about too much.

Peace of mind is perhaps one of the card's big draws, since as with B's current account (and as with accounts offered by such other digital-only banks as Atom), it also comes with an app that helps customers follow a budget.

For example, it provides a list of purchases for the month, enabling users to tag them by category, which in turn helps to prioritise spending and to keep balances under tighter reins.

Added to this, it also provides a balance transfer fee of 0%, enabling cardholders to transfer an existing credit card debt without having to pay additional money on top of the interest.

By contrast, some banks and cards charge customers a fee of up to 3%. For example, the Barclaycard Platinum 18-month balance transfer card charges 2.99%, while the Santander Everyday Credit Card charges 2.75%, although both cards offer 0% interest on balance transfers for the first 18 and 30 months, respectively.

Spending in the sun

Another welcome feature of the card is its free overseas spending, something which could be very beneficial given that UK tourists spend just over £100 million a year on card charges abroad.

However, while customers won't be hit with any extra fees when spending directly with their card, they should be warned that a charge still applies if they wish to withdraw money using it.

This charge equals either 3% of the amount withdraw, or a minimum of £3 if the amount is less than £100. In addition, the cash advance rate is 27.9% p.a. (variable), which is quite hefty.

As such, holders should either make sure they withdraw their cash via other means prior to jetting off, or should stick to using the card directly for making purchases.

Other cards

In light of all the above, the question has to be asked as to whether B's new card is worth getting.

Well, if customers are simply after a low permanent interest rate, there are other better options available.

There is, for example, AA's low rate credit card, which offers a standard variable interest rate of 5.85% p.a. Similarly, Sainsbury's Bank and Tesco Bank both offer cards with a variable rate of 5.9% p.a., putting them comfortably ahead of B's offering.

However, all three cards charge for foreign spending, with AA adding 2.99% for overseas purchases and the supermarket's cards asking for a 2.75% fee.

Given this, it becomes apparent that, if a customer wants a low standard rate and no fees on foreign spending, then B's card may be the one for them.

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