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Loan and card combo from Barclays

24 March 2005

Banking giant Barclays has unveiled the UK's first combined credit card and personal loan.

The company announced that it was writing to 100,000 of its customers to offer them the chance to sign up for Combinations, which it said had been designed to "help customers save money and reduce debts more quickly".

The new scheme offers customers a credit card, which would allow them to pay for goods and services in the normal way, and which would have a typical interest rate of 9.9 per cent APR.

However, three times a year, customers can move their card balance into a separate loan "pot" with a lower interest rate of 6.9 per cent and the option of a fixed repayment.

There is a minimum payment to make each month, but customers are free to pay more as they choose and the payments will automatically go towards clearing the most expensive borrowing first.

The Guardian suggests that, although the new card aims to address some of the criticisms about lending recently levelled at the banking industry, it is quite complicated.
Barclaycard said: "We will be watching the results of the test with great interest."
Experts have pointed out that there are a number of personal loans with lowers APRs on the markets and many credit cards offer 0 per cent deals for an initial introductory period.