Barclaycard to hike minimal funds in main bank card shake-up
How is the way minimum payments are calculated changing?
At the moment, Barclaycard customers have standardised minimum repayment levels, depending on when they opened their account:
- If you opened your account since December 2010, the minimum you must pay each month is the highest of 2.25% of your balance, 1% of your balance plus interest, or £5.
- If you opened your account before December 2010, it’s the the highest of 2.25% of your balance, 0.1% of your balance plus interest, or £5.
From January, your minimum repayment level will be personalised to you – Barclaycard hasn’t explained exactly how this is done, but it’s contacting customers now to tell them what they must pay. However, we do know the range of minimum payments, and from January for most customers it will be the highest of:
- 2%-5% of your balance (exact percentage depends on the customer). This is based on your main balance, and doesn’t include any instalment plan payments which you must also make each month.
- 1%-3% of your balance plus interest (exact percentage depends on the customer). Again, this is of your main balance, and doesn’t include any instalment plan payments, default fees or account maintenance fees you must also make each month.
- £5, or the total outstanding balance if this is less than £5. This is already the case now and isn’t changing.
The changes apply to the Barclaycard Platinum, Initial, Freedom, Cashback, Forward, Littlewoods, Barclays Infinite and Hilton Honors Platinum Visa. We’re checking whether the changes apply to the Barclaycard Rewards card.
However, you WON’T be affected by the minimum payment changes if you’ve taken out a payment holiday – even if this payment holiday has now ended and you’ve started making repayments again. And Barclaycard also says it won’t apply the changes if it would result in a “significantly large increase” to your minimum repayments – though it wasn’t able to tell us how big an increase would count as “significantly large”.
How much more will I end up having to pay each month?
Barclaycard hasn’t been able to tell us how many customers will see their minimum repayments change, or by how much, though it has said no one will see their minimum repayments drop and most affected customers pay more than their minimum repayments anyway.
We’ve seen four emails from Barclaycard explaining the changes to users. The examples given in those emails assume a balance of £2,500 and show monthly repayments would rise by between 30% and 36% – in one case, the example monthly repayment rises by £25, from £69.17 to £94.17. However, we’ve no idea how representative these figures are of the changes as a whole. If you’ve been told your minimum repayments are changing, let us know at [email protected]
Here are a few of the comments we’ve seen from Barclaycard customers on social media: