There’s a new credit card on the block, the Rise credit card, and as with many of these new breed of cards, it is targeting customers with a less than perfect credit history, just in time for Christmas. But whilst there are some that we recommend, as a temporary measure to get you over a financial glitch, we are warning you against this one. Why? Well just look at their representative example:
If you spent £300 on a purchase transaction at the start of your agreement,
incurred total monthly charges of £540 over a period of 20 months and made repayments in accordance with your Terms & Conditions, your APR would be 627% APR representative (variable).
But that’s by no way the worst of it. The way this credit card works, and believe me, we had to really read the small print to work it out, is that you pay a ‘simple’ monthly charge and 10% of what you owe. See below for details of the monthly charges:
Now as far as we can work out, the monthly charge does not actually come off your balance, it is a totally separate charge that is incurred for the privilege of you owning the card. So, as well as your balance, you now have the extra monthly charge, plus you have to come up with 10% of what you have spent on the card.
This is what Rise credit card say in their FAQS section:
‘Your minimum monthly payment is designed to enable you to pay off your outstanding account balance quicker than you would with a typical credit card, and will be calculated each month as the total of your monthly fee plus 10% of your account balance. For example:
a) if your balance is £120, your minimum monthly payment will be £42 (£30 monthly fee plus 10% of £120);
b) if your balance is £280, your minimum monthly payment will be £73 (£45 monthly fee plus 10% of £280);
c) if your balance is £82, your minimum monthly payment will be £25 (which is the minimum monthly payment under the card terms and conditions).
Please let us know if you think that your minimum monthly payments are going to be difficult for you to manage.’
Well yes we do think that adding a huge monthly charge for having this card is going to be a problem for some people.
Our advice is to avoid this card and read our article on credit cards for people with less than perfect credit history.