The companies aim to offer a total of NIS 700 million in credit under the new card and sign up 50,000 holders within six months.
Following approval from the Antitrust Authority, Harel Insurance Investments and Financial Services Ltd. (TASE: HARL) and Israel Credit Cards-Cal Ltd. (ICC-Cal) have launched their joint credit card "Relax" for the insurance group's private customers. This is Harel's first step into the consumer credit market, and one of the most significant by an insurance group.
The card will offer an immediate credit facility of NIS 30,000 without guarantees or collateral. It will be issued through a company that Harel and ICC-Cal will set up together, once the Bank of Israel gives its approval in the coming months. The card will be based on a revolving credit facility offered by ICC-Cal. No CEO has as yet been appointed for the new company.
As part of their efforts to penetrate the market, Harel and ICC-Cal announced today that they will not charge holders interest on loans for the first six months, following which they will be charged interest at rates of prime plus 4-10%. The Relax card will carry a monthly commission charge of NIS 8 (NIS 96 a year). Customers taking the credit card will be required to hold it for at least 12 months. Loans of up NIS 5,000, which will be given regardless of the extent of customers' card use, will be repaid at a rate of NIS 200 a month. Harel will also offer customers signing up for the card free disability and life insurance.
Published by Globes [online], Israel business news - www.globes.co.il - on January 22, 2008
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