HSBC Double Introductory Balance Transfer Deal
After a string of bad news reporting, from the increased base rate interest rates recently announce by the Bank of England to possible charges on current accounts, many UK credit cards were expecting to see some kind of fall-out from the recent investigation and findings of the Office of Fair Trading demanding that UK credit card companies scale-back on their fees and interest rate charges.
 At first glance then, HSBC’s recently announced doubling of the introductory period on their 0% credit card balance transfer deal appears to fly in the face of expert opinion and be a bright spot on an otherwise gloomy skyline. Or does it?
The fact of the matter is that while HSBC’s recent announcement is good for headline news, their initial 0% credit card balance transfer deal was hardly the best offer on the market. At the time of the announcement, HSBC offered 6 months 0% interest on credit card balance transfer to their card. When you compare this offer against those offers made by GE Money and MBNA Europe, each of which has a minimum 0% interest credit card balance transfer deal of 12 months, and it wouldn’t be too unfair to say that HSBC’s previous 6 months 0% interest credit card balance transfer offer was limp and lacking sparkle!
However, even with the fanfare that has followed HSBC’s announced doubling of their 0% interest free credit card transfer period to 12 months, HSBC’s credit card is still struggling to stock-up against some of the industry’s leading UK credit card offers. If you take a closer look at the GE Money credit card offer launched in May 2006 you’ll see that not only do they offer 0% on balance transfer for an introductory period of 12 months, but the same terms are also extended to also purchases. Even after the GE Money promotional period has elapsed, the interest rate their credit card reverts to is a very competitive 12.9% APR. Moreover, even MBNA Europe offer 0% interest on all new purchase for a promotional period of an initial 12 months added for good measure.
When comparable with these and other leading UK credit cards, while HSBC’s recent announcement is good news, it is good news more because it appears to be bucking a trend that many thought would sweep through the credit card industry following the OFT’s comments and action than due the fact that HSBC’s deal is headline, groundbreaking news in the UK credit card industry.
Richard Smith
24th August 2006
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