Barclaycard customers could soon see minimum payments rise - here’s why
Some Barclaycard customers may see their minimum repayments rise from Tuesday (26 January), as the bank makes changes to its pricing structure.
In November of last year, Barclaycard notified customers about the upcoming changes to their pricing structures, in a notice titled ‘changes to your terms and conditions’.
Increasing minimum payments
The new payments are tailored to each customer and vary depending on when customers started using their cards. The exact percentage depends on the customer and this will have been outlined in the November notification, reports the BBC.
Some people could see the minimum repayment rise, but some other charges - including the late payment fee - will instead be limited.
Those who started using their cards in the last decade will see the minimum repayment each month being calculated as the highest of 2.25 per cent of the full balance, 1 per cent of the balance plus interest, or £5. However, this differed slightly for longer-standing customers.
The new charges mean that minimum repayments will be the highest of between 2 per cent and 5 per cent of the full balance, between 1 per cent and 3 per cent of the balance plus interest, or £5.
The new repayment rates are expected to affect those with Platinum, Initial, Freedom, Forward, Cashback, Littlewoods, Rewards and Hilton Honors cards. However, they will not have an impact on Premier or Woolwich cards.
Barclaycard has said that it is increasing payments for some customers in order to help with debt and overall interest costs.
A Barclaycard spokesman said: "We are increasing minimum payments for some customers to help them pay off debt quicker and reduce the overall interest they pay.
"This is part of our ambition to ensure that no Barclaycard customer gets into persistent debt - where they pay more in interest and charges than reducing their debt and take a long time to pay this debt off - and is being put in place to support our customers."