The verdict on Virgin Direct

The card

Virgin claims to put customers in control by enabling them to choose the features their card offers, including interest rates, fees and reward schemes. The new card offers four rate combinations, ranging from 10.9 to 14.9 per cent per cent annual percentage rate (table, page 4). Not bad compared with market leader Barclaycard, which charges a standard 17.9 per cent APR for purchases; but expensive compared with Capital One, which has a zero rate for the first six months and 12.9 per cent APR thereafter; or with the new Halifax range, which charges nothing in the first five months and then 16.9 or 17.9 per cent APR depending on the card.

The Virgin combination with the lowest balance transfer rate - 2.9 per cent APR - also includes an annual £25, higher than any other standard credit card.

The funds

There are two funds, both available through the Virgin Isa and stakeholder pension. The Virgin UK Index Tracking trust was cutting-edge at launch, with no initial charge, an annual charge of 1 per cent, and accepting lump-sum or regular contributions from £1. It is now one of 50 UK index trackers with annual charges of 1 per cent or less (although none accepts such low contributions). Investors who want to track that index will do better with L&G UK Index, according to figures from research company Lipper.

The Virgin Income Trust is a corporate bond fund with a yield of 4.7 per cent gross. It has a low annual charge, 0.7 per cent, but this is expected to rise to 1 per cent shortly. The fund has been in the top half of its sector for the past two years. Patrick Connolly of adviser Chartwell says investors in the Income Fund should be reasonably pleased. However the Norwich Corpo rate Bond fund (annual charge 0.8 per cent) outperformed Virgin Income by a slight margin.

The stakeholder

According to Money Management, the Virgin Stakeholder is one of the cheapest pension schemes, with an all-in annual fee of 1 per cent. However, it offers only two funds: the UK Index Tracking trust; and the Income trust. It is beaten by Legal & General's stakeholder, which has annual charges ranging from 1 per cent to 0.3 per cent and a choice of 40 funds.

The life insurance

Simple term insurance is bought purely on price. Although Virgin's term insurance is usually in the top 10, it is never the cheapest.

Data provider Moneyfacts shows a 35-year-old male non-smoker wanting £100,000 level term insurance over 20 years paying Virgin premiums of £10.25 a month. From Tesco that would cost £8.15.

The deposit account

The Virgin deposit account promises to pay no less than 1 per cent below the base rate and pays 3.5 per cent annual equivalent rate (0.5 per cent under). However, customers can beat this by shopping around and moving their money when an account becomes less competitive. You can earn 4.75 per cent through Northern Rock's Tracker Online account. This is boosted by a 0.25 per cent bonus for the first six months; Northern Rock guarantees the rate will not fall below base rate before 1 January, 2003. For details of other accounts see Moneyfacts

The mortgage

The Virgin One Account was developed by Virgin Direct and administered by Royal Bank of Scotland, which has now bought the mortgage port- folio outright. But the mortgage is still marketed under the Virgin brand. The account is a combined bank account and mortgage, offering cheque, debit card, standing order and direct debit facilities. Virgin argues that by combining the two accounts, you reduce the inter est you pay on your mortgage over its lifetime. But the rates are not competitive - from 5.1 per cent if you borrow less than half the value of your property to 5.7 per cent for 95 per cent.

David Hollingworth of mortgage broker London & Country prefers similar loans from IF (charges of 4.85 per cent), First Direct and Woolwich (both 4.75). He says it is also easier for borrowers to see what is happening within these accounts, as the loan, current account and savings are in different pots.

Virgin One is expected to announce this week changes that should counter the perceived problems of all-in-one accounts.