Barclaycard offer branded misleading

Britain's biggest credit-card company is today accused of luring customers with a "cynical and misleading" zero per cent offer.

The criticism comes on the day the Government released new details of how it plans to tighten regulation of the ?100 billion-a-year credit industry. The attacks on Barclaycard, currently using Friends star Jennifer Aniston to front a multi-million-pound advertising campaign, focus on its latest introductory deal designed to lure customers from rival cards.

This offers zero per cent on balances up to August next year, when cardholders start paying a "standard" APR rate, advertised as 13.9 per cent.

Critics say this is highly misleading as the 13.9 per cent rate is due to be reviewed in September. It will then almost certainly rise, in line with recent increases in the base rate. By the time the zero per cent rate runs out next summer consumers could be staring at a far higher rate, having built up thousands of pounds of debt.

Liberal Democrat MP Norman Lamb, a member of the Commons Treasury select committee, said: "The advertised APR is largely irrelevant in terms of the rate that will apply when people start to pay interest - it is essentially a fictional rate.

"My anxiety is that some people will take advantage of the offer, build up a considerable debt, then find themselves on a higher interest rate than the one advertised."

The Independent Banking Advisory Service said the September date for setting a new rate allowed Barclaycard to escape new rules on advertising APRs due to be introduced in October.

Restrictions in the offer's small print include limiting the "standard" APR at the end of the introductory period to borrowers with good credit records. Others could be charged higher rates up to 24.9 per cent.

A spokesman for Barclaycard said the criticisms were unfounded.

"The fact that the card's interest rate may be different in 12 months is the same for every credit card in the industry," he added.

"When base rates come down then the card's rate will come down again. We have tried really hard to make this the best deal on the market."