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Lower rates for careful Zopa credit card users

Zopa to offer lower credit card interest rates to careful spenders who have better credit ratings

  • Zopa will launch a credit card with interest rates as low as 9.9%
  • The better the borrower’s credit score, the lower the rate they would be charged

Zopa is to become the first lender to offer lower credit card interest rates to careful spenders who have better credit ratings.

In a challenge to the big banks, the peer-to-peer lender plans to launch its first credit card later this year.

Zopa secured a banking licence last month and will launch a credit card with interest rates as low as 9.9 per cent. Jaidev Janardana, the company’s chief executive, told The Mail on Sunday that the better the borrower’s credit score, the lower the rate they would be charged.

Zopa plans to launch its first credit card later this year with interest rates as low as 9.9 per cent

The Zopa app will advise customers on how to improve their credit rating and it said there would be no ‘teaser’ offers, where the introductory rate shoots up after a year.

Zopa said it would eliminate most fees – apart from those that discourage reckless borrowing.

Janardana said: ‘People have started to look at their credit card as a source of trouble, as a source of something that distresses them.

‘What we are offering is something far simpler for them, where it is a single rate, and a much lower rate than the typical rate that is out there because we will not have that zero per cent starting offer.

‘Also, if people want to pay down that debt, they will have a ton of features to help them do that, including the ability to transfer it on to a loan.’

He said that while many app-based banks, such as Monzo and Starling, have created attractive current account features, new banks have so far steered clear of credit cards because they do not have as much lending experience as Zopa.

Read more at DailyMail.co.uk


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