BUSINESS NEWS
Virgin credit card launched
Posted Tue, 27 Jun 2006
Sir Richard Branson on Monday launched the Virgin Money Credit Card, predicting that it would lead to the biggest shake-up ever in the South African credit card market.
The credit card is the first in South Africa to combine no annual fees, no loyalty fees and an interest rate of zero percent for the first three months with an interest rate of 15.75 percent after three months.
The card is also a first to offer a flat five percent interest rate on any positive balance irrespective of the amount.
Speaking at the launch in Johannesburg on Monday, Branson said that South African consumers had long been made to feel grateful just to be offered a credit card by their bank and it was high time customers were given a better deal.
“South African banks are ripping off credit card holders to the tune of R1.5-billion a year through inexplicably high charges and complex fee structures,” said Branson. “The Virgin Money Credit Card now represents the best value in the market
and it signals the beginning of the end of the great South African banking rip-off.”
“It seems absurd to me that South African banks are still charging customers annual fees just to carry around their particular brand of credit card. That the big established banks have somehow managed to cling onto over 66 percent of the credit card market, after years of giving customers such poor value and service, is even more extraordinary.”
“For too long, the attitude of South African banks has been that you are lucky to be their customer. The ultimate expression of this approach is the frankly ludicrous practice of charging fees for cardholders to be loyal to them or to ‘reward’ them!” Virgin Money, he added, believes it is the other way round — they are lucky to have "you as our customer".
John Maxwell, managing director at Virgin Money South Africa, explained that the new credit card offering was designed to provide absolute transparency in fees.
“The average
South African credit card has up to 25 different charges — Virgin Money has eight, and we’ve made it even simpler — we have only five fee numbers,” he said. “We have no Platinum, Gold or Silver cards. Everyone gets our best rates, our lowest charges, no hidden nasties and the best service — no matter what their credit limit.”
Maxwell added that the fees were not just a launch ‘gimmick’.
He said that the credit card offering was developed following extensive research.
“We’ve totally done away with annual fees and loyalty fees, which we believe are impossible to justify,” he said. “Our loyalty programme, Virgin Money VIP, is free. It offers a ‘backstage pass’ to the world of Virgin with discounts at Virgin Active, Virgin Atlantic, Virgin Cosmetics, Virgin Limited Edition and Virgin Mobile — just for using your Virgin Money Credit Card.”
Maxwell explained that the credit card was the just the start for Virgin Money and his objective was to transform
the South African banking sector for the better.
“Our aim is to bring great value financial products and Virgin Money service to a sector where consumers have been taken for a ride for far too long. In that sense it is classic Virgin territory,” he concluded.
Virgin Money also operates in the UK and Australia and currently has two million customers. The company initially launched in the UK in 1995, Australia in 2003, and offers credit cards, personal loans, home loans, cancer cover, insurance, pensions and saving accounts.
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