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Bank offers cars to lure cardholders

Peter Rodgers,Financial Editor
Thursday 20 January 1994 00:02 GMT
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THE CREDIT card war took a new twist yesterday when Bank of Scotland offered to give away 24 cars to cardholders over the next year.

The cars, Renaults worth pounds 12,000 each, will be awarded in a free prize draw open to all the bank's Visa and Mastercard holders - with no need to build up high balances or stack up points for purchases.

With credit card marketing rapidly descending to the give-away tactics of petrol price wars on the forecourts, Bank of Scotland attacked the car price discount schemes offered on the much-publicised GM and Ford credit cards.

Chris Brobbel, divisional general manager of Bank of Scotland card services, said: 'The discounts offered by the GM and Ford cards appear at first sight to be attractive, but if you closely examine their offers you see that cardholders will have to spend enormous amounts of money to qualify for meaningful levels of discount.'

Mr Brobbel also criticised cut- price cards offering low interest rates. 'There is a strongly held view in the industry that these newcomers have misjudged the economics of the credit card market in the UK and that their interest rates and discounts will not be sustainable in the long term,' he said.

Bank of Scotland's package will be offered for the 'foreseeable future'. Two cars a month will be offered as prizes to existing and new customers over the next year.

The cards will have an APR of 21.7 per cent, with up to 50 days' interest-free credit. The card fee will be pounds 10, but will be waived for those spending more than pounds 2,000 a year. There is a bonus of up to pounds 60 for those transferring balances from other cards.

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