BT introduces credit card

BT is launching a credit card that automatically reduces users’ phone or broadband bills every time it is used.

For the first £250 of spend on the card each month, customers will earn one pence for every £2 of purchases. Above £250 of card purchases per month, customers will earn double the discount on their BT bill. The BT Credit Card offers 0% pa on balance transfers for 12 months (subject to a 3% balance-transfer fee), and 0% pa on card purchases for three months, reverting to a typical rate of 16.9 per cent APR (variable).

Karen Darby, founder of SimplySwitch.com, the price comparison and switching service, comments: “This is an innovative move by BT and takes the ‘bundling’ of services to a whole new level. It is quite rare to find any reward scheme operating on a card with 0% balance transfers. This is a strong indication that BT’s pushing the boat out to retain its existing customers.

“Because the interest rates are competitive and the reward scheme operates automatically, the new card will no doubt prove popular. One of its best features is that if more than one BT Credit Card holder lives at the same address, they can all earn a discount off their shared bill. Each cardholder can earn a discount of up to £75 per year, so they could potentially earn enough savings to cover their entire yearly phone bill.

“While BT encourages customers to spend over £250 a month with ‘double discount’ rates, anyone who actually pays their BT phone bill with this card will still be stung by its ‘non direct debit fee’. BT recently received widespread criticism for introducing the higher charges for non-direct debit customers. This would have been an excellent opportunity to appease those people who are unwilling to pay by this method.

“As with all credit cards, unless you pay off your balance every month, once the three-month 0% offer on new purchases expires, you’d be better off cutting up the card or retiring it to the drawer. One other thing to beware of is that, because this card is run by MBNA, customers cannot transfer balances from another MBNA account.”