Post office stamps it's mark on the Credit industry

30 November -0001

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The post office has become the latest player in the lucrative and fast growing credit card industry.

Not content with just entering the market, however, the post office has become the first company to offer a combined credit card and loan, meaning that customers have the option of taking longer to pay larger bills.

The Credit card gives you 0% interest for the firs six months, then begins to charge interest at 14.9%, for purchases under £500

But for those more extravagent purchases, between £500 and £2'000, there is the option to transfer the debt to the loan part of the card, meaninig that the money can be paid off over 12 months, at a reduced rate of 6.8%.

Acording to the Post office, about three quarters of Credit card holders made a purchase of over £500, on average, three times a year. These people would be better off at the end of a year, with the post offics card, than with a credit card that charged 15.9% interest.

Richard Mason, director of credit cards at price comparison website, moneysupermarket.com, said the rate on the Post Office card was competitive but did not make it a best buy.

"Prior to taking out a combined product, the consumer should define their needs - if they have a large balance they would be better off opting for a 0% credit card with a low long-term rate, for example the Capital One card has a low flat rate of 6.9% APR with a 0% balance transfer offer to January 2007.

"If on the other hand, the consumer regularly takes out loans then there are better rates available, such as the Moneyback Bank loan at 5.5%."

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