Barclaycard is set to shake up the credit card sector

Barclaycard has today launched what the company believes is the "broadest ever retail rewards scheme" seen in the UK credit card industry. The new scheme has been trialled in Northampton and is set to be rolled out to the company's 8 million credit card holders from March 2010. Rather than having to apply to the scheme, all Barclaycard credit card holders will automatically be registered for the scheme earning "reward money" of 1% on most transactions.

The scheme already has the backing of over 30,000 stores in the UK with more certain to follow when a company with the influence of Barclaycard comes knocking. However, consumer experts are warning that credit card holders need to consider the pros and cons of such reward schemes against interest rates and charges applicable to both the Barclaycard and competing cards.

It will be interesting to see if the move by Barclaycard, which was relatively unexpected, is followed by the company's competitors and whether indeed this could be the start of a new period of competition in the credit card sector. While any competition in the credit card industry is obviously welcomed by consumers, there is still a need to help those in the UK who are suffering from enormous credit card debt and struggling to pay their monthly bills.