Executive Summary -
When the card was first announced, there was a lot of fanfare about the way this card is supposed to work in terms of the social aspects and how it will shape the features of the card going forward. Now that the card has been around for a while, we now have some clues as to the discussions, votes and new features that have been added.
What happens when you want to introduce a reward card, but you are unsure of what sort of rewards to offer given the competition out there? Well, how about asking your existing customers? Barclays is one of the later entrants into the credit card scene in the US and is looking to introduce a rewards card that is different from the market. As they described it on one of their blog post, there are 5% rotating category cards, online shopping portals, sign up bonuses. Most rewards cards have a combination of such features and there is no real stand out offer in the market.
Rather than wrecking their brains and coming up with something really unique, they have decided to ask their customers instead. And to have an input in this process, you would have to sign up from the Ring MasterCard.
Simplicity and Community Involvement - Rather than relying on bonus sign ups and 0% APR teaser deals, the Ring MasterCard launched with promises of transparency, simplicity and votes on futures features and rewards of the card. The card comes with the following "simple" features. The APR is a flat 8%. Yes, that is 8% for balance transfers, regular purchase APR, cash advances. The fees are clearly labeled and stated before you apply for the card and in many respects, is lower than most other cards. Firstly, there is no annual fee, no balance transfer fees, only a $1 fee per cash advance. The foreign transaction fee is only 1% versus 3% for most regular cards. There is also no "over-the-limit" fees.
Giveback Program - Though it has no "official reward program", the card has something called the Giveback program. Here is how it works. Card members have access to information like how is the card doing (and how are Barclays' cards doing). This includes information like growth in spending per card, new sign ups increase etc. There will be suggestion on how to distribute "profits" to card members (which you can vote on). Below is an except of the terms and conditions of this program.
What Have Members Voted On So Far? - Given that the card members can actually vote on new features, one of the questions you might be asking is what new features has the card acquired since it's launch? Well, here are a couple of examples.
5/15/2013 - Late Fees - On May 15th, members voted on a new late fee structure1. Here is how works now. Each card holder will have one late fee waived once every 12 months. But they will be charged a late fee of $25 and do away with the three extra payment dates.
12/12/2012 - $10,000 Donation - Card members voted to donate $10,000 to Ronald MacDonalds' House of Delaware2.
Community Discussions - One of the attractions of this card is it's social component and the ability to discuss and vote on issues. The Barclays Ring Card maintains a blog where interesting topics are discussed. One of the topics that interest me was the discussion of rewards3. As you could figure by now, this card really does not have any rewards. But many card members would like it to have one. But Barclays explained why this is difficult. Essentially, reward programs are costly to run and most will have to make it up by charging a higher APR. In fact, the average rate for rewards card is about 14% to 15%. To run a card with a 8% APR and no annual fee, it is almost impossible to have a reward program.
There have also been community discussions about having variations to the interest rate in exchange for rewards. For example, ideas given included having a 14% APR but having the ability to earn 1.5% cash back.
Update on Statistics about the Card - As a card member, you will also receive updates on how the card is doing. In the latest update (April 2013)4, Barclays mentioned that they reached $152k in revenue (a 28% increase), accounts grew 15% and balances grew 16%. However, despite this, they reported an increase in late payments over 60 days and with reserves required, the month ended with a slight loss.
Is This A Good Card
Rather than answering this question directly, we have to first take stock of what sort of card is this. In terms of features, I would classify this card as one which has low interest rate and a very simple, transparent fee structure. The APR is a flat 8% for everything. There is no annual fee and no over-the-limit fee and even no balance transfer fees. There are really no rewards.
But this card would not have any applicants and members if the only features are a low interest rate (since many cards have low interest rates). Instead, this card tries to be (and probably is successful) different from others by involving it's members in the status of how the card is doing and more importantly, to introduce new features that the community wants. There are already more than 100 ideas and suggestions and a couple of them (mentioned above) have been implemented. In this sense, it is truly unique in the marketplace and no other card involves it's members in implementation of new features or even modification of existing policies. Barclays is counting on the fact that members want to be part of the decision making process rather than just being a consumer.
If you are looking for a low rate card, and/or if you like what Barclays is doing and want to have a say in how your card evolves, then you should definitely consider this card.
1. BarclayCard Ring: Decision of Late Fees
2. BarclayCard Ring: Presents $10,000 Check to Ronald McDonald's House of Delaware
3. Discussion on Rewards
4. April 2013 Financial Statistics