RBS offers existing customer only credit cards

As UK credit card customers miss 17.8 million credit card payments in the last year, this week the RBS group fights back against bad debt by restricting all credit card applications to existing customers only.

Louise Bond, personal finance expert at uSwitch.com comments: "This isn't the first time we've seen a credit card provider do this and I certainly don't think it will be the last. This move minimises the risk for RBS but at the same time it also limits consumer choice. With a market leading 15 month 0% balance transfer credit card, it's quite disappointing that the deal is only open to customers that have an RBS current account. Given the RBS fee free standard current accounts pays just 0.1% in-credit interest and charges 19.24% EAR on overdrafts this is uncompetitive to say the least.

"However, for RBS current account customers that have a less than perfect credit history, this could be a much needed glimmer of hope to get the next best deal. When a financial provider looks at the credit history of an existing customer they have a wide range of data available to assess the risk of the applicant. When it comes to new customers, they are often reliant on scant credit reports which do not reflect the day to day spending habits of the customer.

"Across the industry it seems the trend for offering the best deals to existing customers only is also appearing in the personal loans market. The average interest rate in the Best Buy table for existing customers is currently 7.94% APR, with Nationwide topping the table with its Existing Customer Personal Loan Plan at 7.7% APR. However, new customers can expect to be hit with an average interest rate for a best buy personal loan of 8.08%, 0.14% higher.