Cahoot, the Internet bank, is looking to develop a credit card with a retailer or service company to compete with rival Egg’s credit card deal with Boots.
Cahoot has spoken to companies about the idea but has not yet found a partner that meets its criteria.
Cahoot marketing and business development director Tim Sawyer says the card would allow consumers to collect loyalty points that could be redeemed with a hotel chain or airline. He says: “We’re fixated with the cost to the customer. We don’t want to introduce a card with a high APR. It’s about finding a partner that buys into that philosophy.”
Cahoot was launched as a division of Abbey National in June 2000 and has 166,000 customers.
Its marketing campaign, through EURO RSCG Wnek Gosper, says the bank “defies convention”. It offers an interest rate of 6.2 per cent on its current account and a typical rate of eight per cent on its credit card.
Cahoot launched a flexible loan this month, allowing customers to borrow and pay back money when they want, within an agreed limit.