By Jill Jaracz


5 Min. To Read

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Last spring, Barclays introduced Barclaycard Ring, a simple credit card that's driven by crowdsourcing, a movement where its members make decisions about the card's policies. What have the masses accomplished this year with the Barclaycard Ring card?

One of the selling points of the Barclaycard Ring card is its concept of transparency, and to that end, Barclaycard Ring has its own community website for its cardholders. In April, Barclays launched the card, and in May it released its first financial statistics to the community. In an effort to show cardholders how the financial institution earns money from the card, it published a series of blog posts to the community that explains each part of the financial statement. Now each month Barclays posts seven revenue and cost items so that its cardholders can see how much money the company makes from the card and how much it costs them to run the card program.

On its community website, Barclays collects financial statement information and shares the community totals with the group. This includes information such as the number of active accounts, the percentage of accounts that have balances in good standing, the average amount of purchases per account, the average balance per account, as well as information about participation within the community. That way the cardholders can see how their activity affects the group as a whole.

Another selling point of the card is that community members have the ability to have a say in some of the financial decisions and policies for the card. One of the financial discussions within the community this year was the topic of late fees. While Barclays couldn't remove late fees altogether, they did want the community to decide on a number of adjustable components that make up late fee pricing. According to its blog, Barclays said about 46 percent of cardholders participated in the vote, and 60 percent of those wanted Barclays to change its late fee policy.

One concept that differentiates this credit card from many others is its Giveback program, in which Barclays shares a portion of the profits from this card with the cardholders, making it a rewards card, albeit a rewards card that plays by different rules. For its rewards Barclays creates two pools of money--one from the card's profits and one from money Barclays gives every time a cardholder refers a new member. Cardholders then can earn money from the Giveback pools if they participate in them; that is, they can earn from the profit pool if they use their card, and they can earn from the referral pool if they successfully refer applicants on the card's website.

Funds from the card's Giveback program also go to support a charity, and cardholders can use part or all of their Giveback bonus to the project. Barclays then matches each dollar donated. Community members vote on which organization they want their funds to go to. In August, the group voted to choose their first charity, and in September the results were announced, with the Ronald McDonald House of Delaware receiving the honors. It used the Giveback funds to renovate the living room of the house.

Unlike other rewards cards with cash back, where the amount you earn is calculated directly from the amount you spend, the Barclaycard Ring community affects your rewards. When everyone uses the card and keeps up to date on payments, everyone wins. When they don't, everyone suffers. In September, cardholders felt this directly when, even though the community saw overall growth, two individuals with higher than average credit lines filed for bankruptcy and left unpaid balances of over $23,000, which meant that Barclays had to reserve money in case the courts approved the bankruptcies, forcing Barclays to eat the losses. This in turn greatly reduced the amount of money in the Giveback pool.

These initiatives have been instrumental to Barclays shaping a customer-centric experience. It's being recognized for its work, having been recognized twice by Forrester Research as one of its 2012 Voice Of The Customer award winners and a 2012 Forrester Groundswell Award winner for excellence in effective business use of social media.

While it's seen initial success and growth, whether or not Barclays will be able to sustain this new, innovative way to run a credit card may very well lie in the hands of the cardholders.

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