Barclaycard has made an audacious move into the instant loan market. Its new credit card offers instant access to credit at 0%, that means it is as speedy as a payday loan but without the enormous interest rate.
You can apply for Barclaycard’s Platinum Purchase with Instant Access card online and, if your application is accepted, you will be given your card details immediately so that you can shop online or over the phone. So, if you are in need of money for an emergency purchase, or a service which you can pay for online, the Barclaycard is a far better choice than a payday loan.
For example, if you needed £250 double-quick to pay for a new fridge/freezer it would cost you nothing to borrow that money from Barclaycard and you could pay if back over 14 months. In comparison it would cost you £81.10 to borrow the same amount from Wonga for just one month.
But unlike a payday loan you aren’t going to receive instant cash in your bank account, so you can’t use it to buy anything where you would need a physical credit card or cash, for example petrol or a supermarket shop.
If you are in need of cash though, it’s worth noting that if you can wait for the card to arrive, you would still be better off withdrawing cash on the card than taking out a payday loan. Take the example above, if you withdrew £250 on your Barclaycard for one month it would cost you £8.18, that’s £72.92 cheaper than Wonga.
Lending criteria for the new Barclaycard is tight though, so if you have a poor credit record you are unlikely to be accepted. If you are rejected consider applying for a card specifically designed for someone with poor credit. Obviously, you won’t get your hands on credit as quickly as with the Barclaycard or a payday loan but the wait would be worth it. Rather than coughing up for a payday loan you could get three months 0% interest on purchases with the Barclaycard Initial, which is specifically designed for people with limited credit. Find out more about bad credit credit cards with our guide.
Barclaycard’s move into instant loans could mark a watershed moment for the industry as credit card providers finally take on the payday lenders and offer borrowers far cheaper, instant access to credit.