That the Virgin Credit Card is a hit cannot be doubted. Since its launch on the 26th of June 2006, the uptake has been enormous: Within the first year, Virgin Money issued no less than 180,000 Virgin credit cards and saved their credit card holders a massive R 30 million in fees. One cannot help but wonder what the numbers will look like when they celebrate their 2nd birthday in South Africa this year.

But, is the Virgin credit card’s popularity the product of a superb marketing effort, or is its popularity simply the product of being a superb product? Perhaps exploring how Virgin stacks up against the Big Four when it comes down to the two greatest grumbles of the average credit card holder will provide the answer.

The Virgin credit card offers highly competitive interest rates. The company does not limit the effect of repo rate increases to negative balances, but also extends the effect to positive balances.

To illustrate: The interest rate on a negative balance is 5% above prime and the interest on a positive balance is 6% below prime. When prime changed in December last year after the Monetary Policy Committee increased the repo rate by 0.5%, Virgin not only increased their interest rate on negative balances from 19% to 19.5%, but also their interest rate on positive balances from 8% to 8.5%. A further plus factor on the interest front is that the Virgin credit card is the only card in the country that offers a three month 0% interest introductory period on purchases.

To gain some perspective, let us look at what the Big Four have to offer in response:

Interest rate on negative balances: 23% - 27%*
Interest rate on positive balances: 0.8% - 4.3%
Don’t offer 0% interest introductory period

Interest rate on negative balances: 20.5% - 25%*
Interest rate on positive balances: 2% - 4.5%
Don’t offer 0% interest introductory period

Interest rate on negative balances: 22%*
Interest rate on positive balances: 0.25% - 5.75%
Don’t offer 0% interest introductory period

Interest rate on negative balances: 21.9 to 31.8%*
Interest rate on positive balances: 3.5% - 7%
Don’t offer 0% interest introductory period

There are no annual card fees, loyalty programme fees and internet banking fees on the Virgin credit card. Only five items are subject to (reasonable) fees, namely

ATM enquiries, withdrawals and cash deposits; branch cash withdrawals and deposits; and Car Card™ transactions.

Standard Bank

Annual Fees: R 135 – R 425 per annum
Loyalty Programme: R 160 per annum
Internet Banking: Free
Number of different fees and charges: More than 25

Absa Bank

Annual Fees: R 113 – R 162 per annum
Loyalty Programme: R 39 per annum
Internet Banking: R 239.40
Number of different fees and charges: More than 18

FNB

Annual Fees: R 99 – R 155 per annum
Loyalty Programme: Free
Internet Banking: Free
Number of different fees and charges: More than 25

Nedbank

Annual Fees: R 110 – R 400 per annum
Loyalty Programme: R 160
Internet Banking: R 273.60
Number of different fees and charges: More than 15

The number of interest free grace days is perhaps the only chink in the otherwise impenetrable Virgin credit card armour. Virgin offers a 25 day grace period, whereas the Big Four offers around 50 days on average.

Even so, the Virgin credit card just shines brighter, further and clearer than the rest. Everything about Virgin Money (the service, the website, the staff) is friendly, honest, simple and convenient. It is this complete package that makes the Virgin credit card offering so exceptional and, for the competition, oh so difficult to emulate.

* Platinum cards were excluded.