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Bank of Scotland Low Rate Credit Card

By: Peter Stephens | Updated: 11th September 2020.

By: Peter Stephens | Updated: 13th September, 2019.

Great for: Low standard APR
2 stars question mark

Bank of Scotland Low Rate Credit Card

Bank of Scotland Platinum credit card

The Bank of Scotland Low Rate Credit Card offers a competitive interest rate on purchases and balance transfers over the long run. It is possible to obtain credit cards with 0% interest rates for an introductory period, but following this, their interest rates can often be relatively uncompetitive. Therefore, for consumers who do not intend to repay their balance over the next couple of years, the Bank of Scotland Low Rate card could be appealing.

CREDIT RATING req:

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

HIGHLIGHTS

  • Low standard APR
  • No annual fee
  • 0% balance transfer fee for the first 90 days

REPRESENTATIVE EXAMPLE

Representative rate 9.9% APR (variable)
Purchase rate 9.95% p.a. (variable)
Based on borrowing £1,200

what we like

  • Low standard APR
  • No annual fee
  • 0% balance transfer fee for the first 90 days
  • ANNUAL FEE:

    £0
  • REPRESENTATIVE APR:

    9.9%
  • INTRO OFFER:

    N/A

KEY SCORES:

  • 1/5 Perks
  • 3/5Fees
  • 5/5APR

HIGHLIGHTS

  • Low standard APR
  • No annual fee
  • 0% balance transfer fee for the first 90 days

REPRESENTATIVE EXAMPLE

Representative rate 9.9% APR (variable)
Purchase rate 9.95% p.a. (variable)
Based on borrowing £1,200

OUR BOTTOM LINE

The Bank of Scotland Low Rate Credit Card offers a competitive interest rate on purchases and balance transfers over the long run. It is possible to obtain credit cards with 0% interest rates for an introductory period, but following this their interest rates can often be relatively uncompetitive. Therefore, for consumers who do not intend to repay their balance over the next couple of years, the Bank of Scotland Low Rate card could be appealing.

Credit Rating Requirement: Good/Excellent

What I like

  • Low interest rate – As its name suggests, the Bank of Scotland Low Rate Credit Card aims to offer a competitive interest rate that could help you to reduce future interest payments. The extent of savings made will depend on the interest rate that you would otherwise have paid on future purchases by using a different credit card. For example, having a £1,000 debt on a credit card with an interest rate of 18.9% would lead to interest payments of £189 over a 12-month period. Having the same debt on a card with an interest rate of 9.9% would reduce interest payments to £99, thereby saving you £90 in interest payments over the course of a year.
  • Balance transfer offer – The card does not charge a balance transfer fee in the first 90 days following account opening. This provides a window for consumers to transfer existing credit card debt in order to potentially benefit from a more competitive rate of interest. Doing so could reduce interest payments over the long run.
  • No annual fee – Having no annual fee means that this card may be equally appealing to consumers who wish to use it frequently and those who intend to use it occasionally.

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

  • Rewards – Unlike a number of other credit cards that offer lower interest rates on purchases, the Bank of Scotland Low Rate Credit Card does not offer any rewards. This means that its cardholders will not maximise their benefits on everyday spending through the receipt of cashback or vouchers for retailers that they frequent.
  • Bonus – The card does not offer a sign-up bonus at the time of writing. Other credit cards have sign-up bonuses such as discounts or vouchers that help them to stand out from their rivals.
  • Foreign usage fee – As with many other credit cards, the Bank of Scotland Low Rate Credit Card charges a transaction fee of 2.95% on amounts spent in currencies other than sterling. Over the long run, this can add up to a sizeable amount. Therefore, it may be worth having a travel credit card that does not charge a fee for foreign usage in addition to the Bank of Scotland Low Rate Credit Card.

How does it stack up?

There are a number of credit cards that currently offer a 0% introductory interest rate on purchases and balance transfers for a set period. Therefore, it is possible to obtain a lower interest rate and make larger savings on interest payments over that set period.

However, following the end of their introductory periods, such credit cards may increase their interest rates to relatively high levels. This could mean that over the long run, the Bank of Scotland Low Rate Credit Card offers a competitive interest rate for consumers who do not pay off their existing balance within the introductory period offered by rival credit cards.

The card’s lack of rewards or a bonus is in contrast to many of its rivals. Other cards may be better able to help consumers maximise the benefits they receive on everyday spending.

While a non-sterling transaction fee could lead to higher charges in the long run, it is a common feature of non-travel credit cards.

Credit score

Applicants for the card should have a good credit rating. The Bank of Scotland website has an eligibility tool which may provide an indication of the likelihood that you will be accepted for the card.

Since the advertised rate is a representative rate, it may only be offered to the majority of successful applicants. The remaining applicants may receive a higher rate of interest. Since the focus of the card is on reducing interest payments on purchases and balance transfers, it may be worth checking before you apply that the card will reduce interest payments versus any existing credit cards you have.

How to apply

Applications for the card can be completed online in minutes. Applicants must be aged 18 or over and be residents of the UK.

When applying, details such as your employment information, address history and financial information may be required. Therefore, it is a good idea to have this information to hand, as well as details of any existing balances that you wish to transfer to the card.

Applicants need to have a regular income. They are also required to be free from county court judgements and individual voluntary arrangements (IVAs), as well as not being bankrupt, at the time of applying for the card.

Is the Bank of Scotland Low Rate Credit Card right for you?

If you are seeking to reduce your interest payments as much as possible over the next couple of years, there may be better options than the Bank of Scotland Low Rate Credit Card available elsewhere.

For example, it is possible to cut your interest payments on purchases and balance transfers to zero for almost two years with other credit cards at the time of writing. For consumers who are likely to pay off their balances within this time, such cards may be more appealing.

However, those same cards may be less attractive over the long run. Their interest rates often rise to relatively high levels following the end of the 0% interest rate period. This could mean that the Bank of Scotland Low Rate Credit Card has appeal over the long run if you are among the 40% of credit card holders who do not repay their balance each month.

The card’s lack of rewards and sign-up bonuses may mean that other credit cards better allow consumers to maximise their benefits on everyday spending. However, for consumers who are looking for a competitive interest rate over the long run, the Bank of Scotland Low Rate Credit Card could be attractive.

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The Motley Fool receives compensation from some advertisers who provide products and services that may be covered by our editorial team. It’s one way we make money. But know that our editorial integrity and transparency matters most and our ratings aren’t influenced by compensation. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. The Motley Fool has recommended shares in Lloyds, Tesco and Barclays.