HSBC, one of the UK's leading high-street banks, issued two new 0% credit card offers this month, however the cards have received some criticism from analysts who claim they are "unfair" because the deal that customers qualify for depends on the method by which they apply.
The first offer is available in HSBC branches and over the phone. It features 0% interest on purchases for 12 months as well as 4.9% interest on balance transfers made within the first thirty days, until January 31st 2012. There is a 2.5% balance transfer fee, and the typical standard APR (annual percentage rate) is 15.9%.
The second card available to customers applying online offers 0% interest on balance transfers made within the first thirty days for 12 months (with a 2.5% balance transfer fee), and 0% on purchases for the first three months. It shares the typical 15.9% standard APR.
Spencer May, head of consumer cards at HSBC, commented: "Our research shows that our customers' behaviour varies according to how they apply for a card. We have seen a clear difference between the needs of our branch and online customers, particularly in relation to introductory offers. With this knowledge we have tailored our two new offers to meet their differing needs."
Industry reaction
Reaction to the simultaneous credit card launch has been decidedly mixed.
Michelle Slade, personal finance analyst at money search engine MoneyFacts.co.uk commented: "New cards from HSBC combine market leading 0% purchase or balance transfer deals, with either a lifetime balance transfer deal or a limited 3-month 0% purchase deal.
"Offering 12 months 0% on purchases for phone and branch applications leads the market, followed closely by 10-month deals from Sky and Sainsbury's Bank. While the online card offering 12 months 0% on balance transfers enters at number three in the MoneyFacts.co.uk best buy charts."
She explained that the best buy charts were dominated by 0% balance transfer deals of 12 months or longer, but that new levels of competition were not being reflected by introductory rate purchase deals. Although the purchase deals market is less buoyant than that for balance transfers, she noted that HSBCS's 12 month offer was one of a few "great deals" currently available.
Commenting on the new cards, Rob Kenly, head of credit cards at MoneySupermarket.com agreed that the launch of a 0% offer on purchases for 12 months had "raised the stakes" and propelled HSBC to the top of best buy tables for introductory deals on purchases.
However, he expressed disappointment that the deal was restricted to branch and phone customers, and not available to those wishing to take up the offer online.
"My disappointment is compounded by the fact the second card launch is an online offer and nothing to write home about. It is offering 0% on balance transfers for 12 months – but Barclaycard, Virgin Money and Capital One all offer longer balance transfer periods than this," he continued.
"Additionally, people must ensure they transfer the balance within 30 days of taking out the deal or they will not benefit from the 0% introductory offer."
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