NEW research commissioned by the Co-operative Bank reveals that UK credit card providers are spending over £ 53 million a year promoting loss-leading introductory offers to a small number of "rate chasers."
The research by Nielsen Media shows that ? despite the massive £ 53.6 million advertising spend, which is part of an annual £ 83.6 million total credit card promotional budget ? just 11 per cent of consumers are considering taking out a zero per cent card in the next six months, while six out ten cardholders have never been tempted by an opening offer.
According to the survey's findings, a typical rate chaser is a male homeowner, aged between 30 and 40 with no dependents.
The bank's poll shows that credit card customers are not fooled by low introductory rates ? 77 per cent said no annual fee and 64 per cent stated a competitive standard rate as the most important considerations when choosing a new card.
Following these findings, the Co-operative Bank has launched a new Clear card aimed at customers looking for a straightforward credit card with one low standard, variable rate of 8.9 per cent typical APR for both purchases and cash advances. Unlike many other cards there is no fee for cash advances.
Sheila Macdonald (pictured), the bank's Chief Operating Officer, said: "The profile of the typical rate chaser is attractive to credit card companies but it appears that the whole market is completely skewed towards this small minority.
"It is obvious that the days of these unsustainable offers are numbered and that in the future credit card companies will have to offer transparent, competitively priced deals with one, low rate for all transactions.
"That is why we have launched our new Clear card with exactly what the majority want ? long-term good value, not short-term gimmicks. "