What is it?

A credit card that offers lower interest rates for borrowers who pay a higher proportionof their balance each month. The card is likely to be available before November.

How does it work?

Customers who make a minimum repayment (2.5 per cent of any outstanding balance) on the card, will pay 16.9 per cent interest. Those who pay between 5.05 per cent and 9.99 per cent of their balance each month will pay a lower rate of 12.9 per cent. However, borrowers who repay more than 10 per cent of their balance each month will be rewarded with an interest rate of 9.9 per cent.

What are the plus points?

The card provides an incentive for customers to eat into their outstanding debt by repaying more than the minimum charge. New customers are likely to be offered 0 per cent balance transfers for three months.

What are the drawbacks?

The rates offered by Barclaycard are higher than other cards on the market. Capital One’s Platinum card charges 6.9 per cent, while American Express charges8.9 per cent on its Platinum card regardless of how much customers repay each month.

Richard Mason, of Moneysupermarket.com, the price comparison website, says: “Barclaycard borrowers will have to repay a huge amount each month to get a rate of less than 10 per cent.”

The verdict

Thumbs down. Mr Mason says: “This card is a complete waste of time. Borrowers who switch their balance to a card offering a long-term 0 per cent deal will ensure that every repayment they make goes directly towards paying off the debt, rather than paying interest.”

GRÁINNE GILMORE

For more on consumer affairs visit www.timesonline.co.uk/consumeraffairs