Best and Worst: Borrowing on a gold card

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The Independent Online
ANYONE who plans to take out a gold card should be aware that there are two distinct varieties, writes Caroline Merrell.

One type is a charge card, which is designed to be paid off each month, the other is a credit card. However, most of the charge cards offer an overdraft facility, which will carry a far lower interest rate than gold credit cards.

Traditionally, charge cards have had interest rates on overdrafts that are a few percentage points above the base rate, typically about 8.5 per cent, while the interest rates for an overdraft through a gold credit card are more than double that. However, some interest rates on charge cards have recently crept close to credit card rates.

Some banks offer both types of card. Midland, for instance, offers both a Gold Mastercard and a Gold Visa card. The interest rate on the Visa card is more than double that on the Mastercard.

A Midland spokeswoman said: 'To qualify for the Mastercard, a customer must be earning pounds 25,000 a year and have pounds 15,000 equity in a house.'

For the Visa credit card, a customer only has to be earning pounds 20,000 a year, and does not need equity in a house.

The top four credit cards carry the same interest rate, but the Northern Bank has an annual fee of pounds 40 while the Bank of Ireland's Amex card carries an annual charge of pounds 85. Northern Bank's card is only available to its customers in Northern Ireland.

Lloyds Amex charge card also carries an annual fee of pounds 85 and a 14.5 per cent interest rate. A Lloyds spokeswoman said: 'The pounds 85 fee is levied by Amex, and gives access to many premium services.'

---------------------------------------------------------------- BORROWING ON A GOLD CARD ---------------------------------------------------------------- The Best Rate Fee 1 Northern Bank Gold Service Mastercard . . 8.50 Pounds 40 2 Midland Bank Gold Service Mastercard . . .8.50 70 3 Bank of Scotland Premier Card Visa . . . .8.50 70 4 Bank of Ireland Gold Card Amex . . . . . .8.50 85 5 Robert Fleming Visa . . . . . . . . . . . 8.60 None The worst 12 Barclays Premier Card Visa . . . . . . . 13.0 80 13 Lloyds Bank Gold Card Amex . . . . . . . 14.5 85 14 MBNA Visa Gold Card . . . . . . . . . . .17.9 35 15 Midland Bank Gold Card Visa . . . . . . .18.1 35 16 Cooperative Bank Gold Card . . . . . . . 21.7 None Figures are for the annual interest rate on overdrafts and excludes any annual fee.

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