Hi ag26,
The answer to your immediate question appears to be that there are
currently no such UK credit cards. However, other options are
available that might suit your needs even better.
Credit cards that pay interest on credit balances used to be offered
by Beneficial Bank PLC before it was taken over by HFC Bank. I called
Beneficial Customer Services on (0870) 240 0990, and they confirmed
that their cards no longer pay interest.
No other UK bank appears to have taken on this sector of the market,
although there are Irish and US cards that pay interest on credit
balances.
However, you can probably do better financially by getting a credit
card that pays you a cash rebate on your credit card purchases. These
are offered by Alliance & Leicester, Halifax, Egg and others. The cash
rebate is up to 1% of your purchases (up to 1.6% for short-term
offers), and some of these cards have no annual fee.
If you spend (say) £400 per month on the credit card, you could
receive £48 cashback each year (1% of £4800) without needing to tie up
any cash to maintain a credit balance. On the other hand, if you had a
card that paid (say) 2% per annum interest on credit balances, you
would need to maintain a continual credit balance of £2400 to gain the
same benefit.
If you are able to maintain a credit balance, you can gain the "best
of both worlds" by opening an interest-bearing account from which
funds are taken by direct debit when credit card payments fall due.
Then, you earn interest on your credit balance in addition to the
cashback. If you do this, be sure to specify that the direct debit
should be for the full balance each month, or you will end up paying
interest on your unpaid credit card balance. Most credit card issuers
will set up a direct debit for just the minimum monthly payment unless
you specifically request otherwise.
Here is a listing of UK credit cards that offer cashback:
1st Credit Card UK's ranking of UK credit cards
http://www.1st-credit-card-uk.co.uk/cash_back_credit_card.html
Another option is to obtain a credid card from an offshore bank that
accepts UK applicants. One such card is the "Credis" Credit Card from
LGB Bank in Cyprus. They claim to pay 6% on credit balances, but this
offer appears to be a secured credit card (that is, secured for the
bank's benefit) with a linked deposit account that is used as security
against the line of credit. The credit limit is 75% of the balance of
the linked deposit. If you are looking for an offshore account for
other reasons, the Credis card might be worth investigating:
Credis Secured Credit Cards
http://www.crediscreditcards.com/
Even though this answer is not exactly what you were hoping to hear, I
hope you find the information useful and the answer worthwhile. Please
let me know if you need any clarification.
Additional link:
Bank of Ireland credit card that pays 1% on credit balances
http://www.boi.ie/papp/cc_pre_qualifier
Google search strategy:
"credit card that pays interest"
://www.google.com/search?q=%22credit%20card%20that%20pays%20interest%22
"credit card" "interest on credit balance"
://www.google.com/search?q=%22credit+card%22+%22interest+on+credit+balance%22
"credit card" "credit interest" uk
://www.google.com/search?q=%22credit+card%22+%22credit+interest%22+uk
Regards,
eiffel-ga |
