In the world of consumer borrowing, the affordability of a loan -- aka scoring the best rate -- is dependent on a few factors: the applicant’s current debt ratio, income level, existing assets, and their credit score.

However, credit cards are usually exempt from this model: they come with a fixed cost of borrowing and, while a pristine credit score can qualify you for plusher rewards and a higher limit, there isn’t much wiggle room when it comes to paying interest.

Previously, customers looking to pay less could apply for low interest options, or sign up for limited-time balance transfer promotions. Now, MBNA has changed the game, introducing a credit card that tailors its interest rate based on the cardholder’s credit score.

The new card is actually a relaunch of the lender’s popular TrueLine MasterCard, a no-fee option that offered 9.99% on purchases and balance transfers. The new version will charge an interest rate ranging from 5.9% (the lowest on the market), to 14.99%, which is quite competitive in comparison to other market options.

Card details

The Trueline is renowned as a solid option for those simply looking to pay less -- its former iteration featured no fees or frills -- just the low interest rate of 9.99%. In fact, it was these no-nonsense features that won the card top spot in our annual Best of Finance Awards for best low interest card option.

How does it work?

The custom interest rate is based on an applicant’s credit bureau file (an inquiry is automatically generated when the application is submitted to MBNA), and cross referenced with the information TransUnion keeps on file. If the information is a match, the tailored interest rate is provided by MBNA.

How much would you save?

It’s amazing the difference a few basis points can make over time; using an interest-payment calculator, we crunched the amount of interest paid over a 24-month period, based on the average Canadian balance of $3,277.33 and the resulting minimum payment (assuming no annual fee is charged). Here’s what we found:

Interest rate: 19.99% Minimum payment: $90.13 Interest paid: $1170.7

Interest rate: 9.99% (former TrueLine interest rate) Minimum payment: $60.08 Interest paid: $585.32

Interest rate: 5.99% Minimum payment: $48.89 Interest paid: $345.34 That’s a difference of paying $239.98 less over a two-year period compared to the former Trueline - and a whopping $816.36 compared to the market average!

In your best interest

It is not yet clear whether existing TrueLine customers will have their interest rates reassessed or will continue to pay the previous APR of 9.99%.

Penelope Graham

A first-time homeowner and newbie investor, Penelope Graham is the quintessential millennial, navigating the world of personal finance and wealth management. A self-professed monetary policy nerd, she follows the often-controversial housing market closely and specializes in mortgage, credit card and personal finance news.

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