Capital One goes easy on consumers with low credit scores
A new credit card from Capital One is to reward customers who make timely payments a reduction in interest rate.
The Capital One Progress credit card is open to those who have suffered rejected applications in the past, offering an initial rate of 34.9 per cent which drops five per cent every six months for "good behaviour".
According to financial advice website uSwitch.com, after 18 months of timely repayments, customers can enjoy a rate of 19.9 per cent, which is close to the industry average.
With credit card companies denying some 3.32 million consumers from taking out the products in the past 12 months, the site believes those who have made a few "innocent mistakes" will be able to take advantage of the deal.
Louise Bond, personal finance expert at uSwitch.com, said: "This is a similar concept to the Initial Mastercard from Barclaycard. This also starts with an APR which is higher than average at 27.9 per cent.
"Again, this card is designed to strengthen credit ratings and is a much more cost-effective option than sub-prime deals which often charge around 40 per cent APR."
Recent research by credit card company Sainsbury's Finance showed that products with cash back or reward schemes are becoming increasingly difficult to find.
Those looking to take advantage of the discounts on plastic will find that credit card companies have withdrawn 11 per cent of all reward schemes over the past year, according to the firm.
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