Tesco Bank Withdraws New Credit Card After Three Weeks

Tesco Bank underestimated the desperation of in-debt consumers seeking to find ways to pay off credit card balances.

Tesco recently offered UK consumers a credit card program that allowed fee-free balance transfers. However, according to the BBC News, the bank has confirmed the end of the free interest offer only three weeks after launch.

The quick withdrawal of the Tesco credit card illustrates the overwhelmingly high consumer demand for credit transfers and their urgent need to obtain debt support. Credit card transfer accounts have not been common since 2007, and for good reason. Tesco made the attempt to revitalize the market, but was scared out of the deal due to a large consumer demand.

Credit card balance transfers allow account holders to pay off pre-existing credit cards debt balances without additional charges. These accounts were popular amongst in-the-hole consumers who could no longer manage debt costs and needed help saving money. This type of credit card account is a great tool for saving money, but it can also encourage further debt and irresponsible spending habits. 

Similar credit card deals were popular before 2007 during the credit boom. However, the market died off after the 2008 credit crunch began. Credit card companies commonly solicited low-fee or interest rate-free offers as a way to attract new customers. Business was good for the new credit company, but detrimental for the prior credit cards that needed to be paid off.

Financial lenders in the UK have made several attempts to eliminate such credit card accounts. They frown upon the consumer practice of borrowing money, incurring debt, and signing up for balance transfer cards. Moreover, the poor credit process caused major profit losses for card providers.

Tesco Bank re-entered the abandoned financial sector, and marketed its new 12-month interest free card. But three weeks later, the deal was withdrawn. The retail bank notified the public of a reform that installed a 0.9 percent balance transfer fee. However, customers will still be given zero interest on credit upon the first year of registration.

Tesco is keeping quiet about why it decided to suddenly pull the card off the market, and is choosing not to comment on the reason.

To read the full story at BBC News, click here.