Virgin Money goes positive on card order payments
- Positive payment hierarchy change for customers
Virgin Money is further improving its credit card range to enable customers to pay off their most expensive debt first as it switches to a positive payment hierarchy from September.
Under the new terms and conditions, repayments will be allocated to clearing debt charged at the highest interest rate before debts at lower rates, which means the vast majority of customers who don’t pay off their balance in full each month will pay less interest.
The change should save around £70 annually for customers transferring a £3,000 balance to a Virgin Money card at a 0% promotional rate and then spending £1,000 at higher standard rate on the card over a year, as repayments will now go towards paying off the higher rate card purchases first*.
Virgin Money took the first step towards the revamp with the launch of its 12/12 credit card, offering 0% for 12 months on card purchases and balance transfers (18.9% typical APR (variable), 2.98% fee for balance transfers) in March ahead of a joint industry agreement announced by the Department for Business Innovation and Skills and the UK Cards Association.
The payment changes come into effect from September 1 across the Virgin Money credit card range – which includes its Virgin Money Credit Card, offering 0% for 14 months on balance transfers (2.98% fee) and 0% for three months on card purchases, (typical 16.6%APR (variable)) plus its cash back Charity Credit Card, which offers 8.9% on balance transfers until the amounts transferred are paid off (typical 12.9% APR (variable).
Grant Bather, spokesman at Virgin Money said: “Changing the order of payments is the next logical step in the enhancement of our credit card range. Our aim is to make everyone who is a Virgin Money credit card customer better off and we hope this change goes some way to achieving that.”
The new credit card joint industry agreement comes into effect in January 2011 and includes the right to refuse credit limit increases and to request credit limit reductions; the right to have more time to reject rate increases; the right to annual statements showing the cost of their card; and for people in financial difficulties the right to more information including comparisons of the cost of only paying the minimum on their card.
Notes to Editors
* Based on 0% for 12 months on purchases and balance transfers. Includes 2.98% balance transfer fee
For further information
Tel: 07834 844 427
Kevan Reilly / Chris Jarvis
Citigate Dewe Rogerson
Tel: 0207 638 9571
About Virgin Money:
- Virgin Money is Virgin’s financial services arm and was established in 1995 as a joint venture between the Virgin Group and Norwich Union.
- In 1997, Virgin Direct Personal Financial Services Limited launched The Virgin One Account, a joint venture with The Royal Bank of Scotland that offered the UK’s first current account mortgage direct to the retail market. In 2001, RBS bought out the Virgin Group’s stake in the joint venture.
- In April 2004 the Virgin Group took 100% ownership of Virgin Money.
- More than 2.5 million customers are currently serviced through the Virgin Money brand, which offers Payment Cards (Credit Cards & Prepaid Cards), Savings and Investment products (Stakeholder Pensions, Children’s Pensions, Employers Pensions, FTSE Tracker ISA, Bond & Gilt ISA, Climate Change ISA, Cash ISA, and Unit Trusts), General Insurance products (Motor, Home, Travel, and Pet) and Life Assurance products to the UK market.
- Virgin Money’s brand ambition is to make “everyone better off” – this philosophy underpins our approach to business by offering good value to customers, treating employees well, making a positive contribution to society and delivering a profit to shareholders.
- Virgin has signed a five-year deal to be the official sponsor of the London Marathon, the biggest annual fundraising event in the world. The inaugural Virgin London Marathon is on 25 April 2010. Virgin Money, the financial services division of the Virgin Group is leading the London Marathon sponsorship with the ambition to help runners raise £¼ billion over 5 years and will use its infrastructure, online capability and financial expertise to deliver that through Virgin Money Giving.
- Bank of America Europe Card Services provides the Virgin Credit Card range.