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"Barclays accused of trying to get consumers to get deeper into debt"

By admin | June 17th, 2008 | Credit Cards, General

Barclays Bank has been at the centre of fresh controversy recently after being accused of encouraging consumers to get even further into credit card debt. Credit card debt levels in the UK are already through the roof, and experts feel that the introduction of a new card from Barclays, which is due to be put on trial, could increase these debt levels. Barclays has announced its intention to introduce a credit card that offers credit limits of up to £25,000 subject to status.

The Freedom credit card will offer an interest rate of 14.9%, and will enable consumers to transfer their balance to a loan that charges an interest rate of 6.6%. In a recent advertisement for the Freedom credit card the advertisement stated: ‘If I see something I want, I need to be able to act quickly and not have to wait to arrange finance, or be stuck with a high rate of interest.’

Some experts are stating, however, that the Freedom card actually enables and encourages consumers to get themselves further into credit card debt, and that this is further aided by the potentially high credit limits offered and the ability to switch the balance to a loan, which then frees up the credit card again. The loan offers a fixed monthly repayment and can be paid over terms ranging from three months to seven years.

Credit cards have been blamed for rising consumer debt levels over recent years, and this high limit card could send credit card related debt levels spiralling through the roof according to some industry officials. Barclays has confirmed that the card is to go on trial but has not mentioned how long the trial period will last.

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Tags: interest rate, credit card, debt

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