Virgin issues 50 000 credit cards in SA

JOHANNESBURG – British entrepreneur Richard Branson’s Virgin Money said yesterday it had issued 50 000 credit cards six weeks after it launched in South Africa with a pledge to take on local banks that over charge customers.

Virgin Money, a joint venture between Virgin Group and South Africa’s biggest retail lender Absa, said in a statement it had issued 50 000 credit cards and 20 000 car cards, used to pay for petrol and road tolls. “Virgin Money has brought real competition to a fat-cat South African credit card market and stimulated a permanent shift towards lower pricing,” said John Maxwell, managing director of Virgin Money South Africa, in a statement.He estimated Virgin – which bills itself as a consumer champion – had already saved South Africans 13 million rand in saved fees and said credit card holders were being “ripped off” to the tune of 1,5 billion rand a year.Consumer groups have accused South Africa’s major banks of over-charging customers and slapping fees on services that are often free in other countries.The country’s competition authority is holding a public inquiry into banking charges.Virgin says the MasterCard-backed credit cards – which bear the Virgin brand – are the first in South Africa to axe annual fees and scrap interest for the first three months, offering a variable rate of 15,73 per cent thereafter.Virgin runs a chain of upmarket gyms in Africa’s biggest economy and has secured a long-coveted foothold in its lucrative mobile phone market.It is mulling plans for a regional low-cost airline and may use South Africa as a springboard to expand into other parts of Africa.Virgin Money already offers financial services in Britain and Australia.Absa is controlled by Britain’s Barclays.Nampa-Reuters”Virgin Money has brought real competition to a fat-cat South African credit card market and stimulated a permanent shift towards lower pricing,” said John Maxwell, managing director of Virgin Money South Africa, in a statement.He estimated Virgin – which bills itself as a consumer champion – had already saved South Africans 13 million rand in saved fees and said credit card holders were being “ripped off” to the tune of 1,5 billion rand a year.Consumer groups have accused South Africa’s major banks of over-charging customers and slapping fees on services that are often free in other countries.The country’s competition authority is holding a public inquiry into banking charges.Virgin says the MasterCard-backed credit cards – which bear the Virgin brand – are the first in South Africa to axe annual fees and scrap interest for the first three months, offering a variable rate of 15,73 per cent thereafter.Virgin runs a chain of upmarket gyms in Africa’s biggest economy and has secured a long-coveted foothold in its lucrative mobile phone market.It is mulling plans for a regional low-cost airline and may use South Africa as a springboard to expand into other parts of Africa.Virgin Money already offers financial services in Britain and Australia.Absa is controlled by Britain’s Barclays.Nampa-Reuters