Barclaycard wants to make friends with 0% offer

Barclaycard wants to make friends with 0% offer

Britain's most widely held credit card, Barclaycard, is attempting to restore its battered reputation by overhauling its image and launching what is thought to be the longest 0% interest rate offer ever seen in the UK.

Barclaycard yesterday indicated it was keen to show it had "listened" after a miserable few months which saw it propelled on to the front pages after Barclays chief Matt Barrett admitted he did not borrow money on credit cards because they were too expensive.

Weeks later, the Office of Fair Trading forced Barclaycard to withdraw adverts for a "0% forever" promotion which the consumer watchdog said were highly misleading.

Now, shortly after announcing that the Friends actor Jennifer Aniston is to be the new "face" of Barclaycard, the company is confronting critics who say the card represents poor value for money by offering a new deal that should take it to the top of the best buy tables.

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Next week Barclaycard is launching a card that gives a 0% introductory interest rate on both balance transfers and purchases until August 2005. This is the longest 0% offer on the market by some margin.

Some card companies offer deals lasting up to nine months, but the new Barclaycard has strings attached: customers who do not pay their bill on time or exceed their credit limit will lose the 0% offer.

The first time a card-holder breaks the agreement in this way, Barclaycard will send them a reminder. If they do it a second time, their balance will revert to the standard purchase interest rate, which for most will be 13.9% APR but for some will be as high as 17.9% or 24.9% APR. This is made clear at the outset, said a spokesman.

Addressing criticism that card providers are slow to pass on interest rate cuts, Barclays said the new card's main interest rate will track the Bank of England base rate, though with economists predicting further interest rate rises, the timing is a little unfortunate.

"When you look at the credit card industry in general, it has had a bit of a bashing, and because we are the biggest we have taken our fair share of that," said the spokesman. The new deal was "a really clear sign we have listened to what the world is saying about the industry".

In recognition of concerns about spiralling consumer debt, the adverts featuring Aniston will be less about "spend, spend, spend on your Barclaycard" and more about "when an opportunity comes up, we are here to help".

Guardian Unlimited © Guardian Newspapers Limited 2003