Direct Line to launch credit card

Direct Line, the telephone insurance, pensions and mortgages arm of the Royal Bank of Scotland, is thought to be planning a credit card launch.

The insurer would not make any comment about its plans but its marketing department has been talking to London advertising agencies outside its roster about a financial services project, said to be a credit card.

Direct Line is credited with revolutionising the motor insurance sector when it introduced telephone sales in 1985. It has extended its services into the motor recovery sector, and launching a credit card offering value for money and speed of service would be a logical extension according to observers. Last year, Direct Line Financial Services appointed its first director of marketing, Chris Herbert, formerly of Yorkshire Bank.

The credit card market is becoming increasingly crowded with the prospect of new entrants such as the US giant Discover, which will launch its card in the UK this year. Established card providers such as Barclaycard are coming under pressure from rivals offering lower interest rates on credit. The bulk of Direct Line’s 21m ad budget is held by Mortimer Whittaker O’Sullivan. Lowe Howard-Spink works on life cover and Scots agency 1576 handles financial services and mortgages.