The Royal Bank Credit Card

By: Peter Stephens | Updated: 6th May, 2019.

Great for: Low APR and no foreign transaction fees
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The Royal Bank Credit Card loses some ratings points because of what's not there -- rewards, 0% offers, etc. But thanks to the low standard APR and no foreign transaction fees, this is still a very solid card, especially for travelers.

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CREDIT RATING req:

  • Poor/No credit
  • Fair/Average
  • Good/Excellent

HIGHLIGHTS

  • Low APR of 9.9% for qualified applicants
  • No fees on foreign transactions
  • No balance transfer fees
  • Even lower balance transfer rate of 6.9% for qualified applicants
  • No annual fee
  • To apply, you must be 18+, earning at least £10,000 per year and a UK resident

REPRESENTATIVE EXAMPLE

Purchase rate 9.9% p.a. (variable)
Representative APR 9.9% (variable)
Assumed credit limit £1,200
Annual fee £0

what we like

  • Low standard APR
  • No foreign transaction fees
  • No balance transfer fees
  • ANNUAL FEE:

    £0
  • REPRESENTATIVE APR:

    9.9%
  • INTRO OFFER:

    N/A

KEY SCORES:

  • 1/5 Perks
  • 5/5Fees
  • 5/5APR

Our Bottom Line

The Royal Bank Credit Card offers consumers the chance to use their card abroad without incurring transaction fees. For spending abroad, it applies the Mastercard exchange rate and does not charge a non-sterling transaction fee. No annual fee means that the card could save a significant amount of money for consumers who travel internationally for business or pleasure.

However, a lack of rewards/cashback and the fact that there are no incentives such as a 0% interest period mean that the appeal of the card is reduced. There may be better options for consumers seeking to transfer a balance from other cards, although the lack of a balance transfer fee may mean it has a degree of appeal in this regard. As a result, it may be a good idea to use the Royal Bank Credit Card as a second card mainly for international rather than day-to-day usage.

Credit rating requirement: Good/Excellent

What I like about the Royal Bank Credit Card

  • No foreign transaction fees – Unlike the majority of credit cards, the Royal Bank Credit Card does not charge a non-sterling transaction fee. When using it abroad, consumers obtain the standard Mastercard exchange rate. This makes it perfect for holidays and international business trips. Other cards can charge up to 3% for non-sterling transactions, which can really add up over the course of the year.
  • No annual fee – The card has no annual fee. Since it offers no rewards or cashback, though, consumers may be better off having a day-to-day card that provides those features while using the Royal Bank Credit Card for holidays and business trips. Having different cards could offer higher rewards and savings than using only one card.
  • No balance transfer fee – Although the card does not offer a 0% balance transfer fee period, it does not charge a fee for transferring balances from other cards. Therefore, if an individual has a balance held elsewhere that is subject to a higher interest rate than that offered on the Royal Bank Credit Card, it may make sense to transfer it in order to benefit from lower interest payments.
  • Wide acceptance – Since the card is a Mastercard, it is accepted at over 43 million locations worldwide. Using it abroad should therefore be relatively straightforward. The card could be a realistic alternative to taking cash or other forms of payment when travelling internationally, due to a high chance of it being accepted in a range of hotels, retail outlets and leisure locations.

Why trust me

I have been writing for The Motley Fool since 2013, and have experienced the booms and busts of the UK economy for a number of decades both as an investor and a consumer. I have held various senior management positions during my career, while also setting up my own manufacturing company in 1996. It was subsequently sold in 2007. I have a keen interest in consumer finance, as well as in the stock market.

What could be improved

  • No cashback – The card does not offer any cashback or rewards. Other cards, such as those offered by American Express, offer cashback of up to 1% without there being an annual fee. RBS also has its own reward card, which may be a better option for consumers on a day-to-day basis. As a result, the Royal Bank Credit Card’s appeal could be as a second credit card used abroad.
  • Balance transfer offer – Although no balance transfer fee is a plus, the card does not offer a 0% balance transfer period. While its interest rate may be lower than the rate being incurred by an individual on an existing balance held elsewhere, there are other cards that offer no balance transfer fee plus a 0% interest rate period on balance transfers. For individuals seeking to reduce the interest they are paying on existing debt, there may therefore be better opportunities elsewhere.
  • No customer enticements – A number of other cards offer enticements for new customers, such as a higher rate of cashback for a limited time or a specific number of Avios points. The Royal Bank Credit Card, though, has no such incentives available. While this only affects its appeal in the short term, nevertheless it may be possible for consumers to gain a financial boost from rival cards.

How does the Royal Bank Credit Card’s offer stack up?

It is rare to find a credit card that offers no fees on non-sterling transactions. This is the major selling point of the Royal Bank Credit Card. It could save consumers significant sums of money over the long run. With no annual fee, it may prove to be a perfect second credit card that is mostly used abroad and occasionally used when required in the UK. Since it has no cashback or rewards available, it may be worthwhile to use a different card on a day-to-day basis.

Similarly, for consumers who are looking to reduce the amount of interest they pay on existing balances held elsewhere, there could be better options available. While having no balance transfer fee may make the card relatively appealing, depending on the interest rate being incurred elsewhere, it is possible to obtain a 0% interest period on balance transfers with other cards while also benefitting from no balance transfer fee.

The Royal Bank Credit Card credit score

The card is available to all UK residents over the age of 18 who have a bank account. The minimum annual income requirement is £10,000. It takes five minutes to obtain a decision about whether you have been accepted for the card when applying online. If you are successful, the card should arrive within five to seven working days.

As with all cards, the interest rate quoted is representative. This means that it is offered to 51% of successful applicants, with the remainder being offered a different rate. Should the rate offered be lower than the rate being paid on an existing balance held elsewhere, it may be worth transferring the balance to the Royal Bank Credit Card, due to its lack of a balance transfer fee. However, better options specifically for balance transfers are available elsewhere.

How to apply

Applications can be made online, by phone or in an RBS branch. Entering information for the application should take about 10 minutes online. Consumers will require information such as address details for the last three years, bank account details, as well as details of income, outgoings and employment. Information regarding any other credit cards from which a balance is set to be transferred will also be needed.

Is the Royal Bank Credit Card right for you?

The card’s lack of a non-sterling transaction fee is its main selling point. With many people travelling abroad multiple times per year and credit cards being a common way to buy a variety of items while away on business or on holiday, the savings could soon add up. Since there is no annual fee, the card could also be a perfect back-up for consumers who regularly use cards that are not as widely accepted as Mastercard, such as American Express.

However, for consumers seeking to slash their interest payments on other cards or benefit from cashback/rewards, there are better options available elsewhere. Likewise, a lack of sign-up incentives from the Royal Bank Credit Card may reduce its appeal versus that of rivals.

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