Barclaycard - No Good For People Paying Their Balances In Full

overworked_underpaid · 4 February 2006 at 7:29PM

Bad news for people like me that pay their Barclaycard balance in full every month. I think I will start to use my Egg card now. :mad:

Barclaycard gets tough on customers

Barclaycard customers who pay their bills in full each month may have their payment date suddenly brought forward, the bank has told the BBC.

The move could put customers at risk of incurring a £20 late payment fee if they do not examine their bills carefully each month.

This revelation comes amid continued criticism of bank profits and not long after the Office of Fair Trading (OFT) investigation into late payment charges.

However, Barclaycard denies it is trying to rake in late penalties, and says it never guarantees customers a fixed payment date each month.

Speaking to BBC Radio 4's Money Box programme, Barclaycard's Ian Barber said any change of date will be explicitly outlined on the customer's statement.

He said Barclaycard was "having to face up to the fact that clearly we are not making as much money out of customers that pay their bill in full as we are out of those that borrow", he said.

He added that the company was "quite open about it... if you pay your bill in full every month you may get a few days less to pay...

"That is the fact of it and we are not going to shy away from that."

Holiday period

Money Box listener Justin from Cambridge contacted the programme after he received his latest bill.

"When I looked at all my previous statements and my February statement, all the payments were required on the 9th of the month. The only one which is not is the December statement which requires payment by the 3 January.

Justin believes Barclaycard has a policy to maximise penalty payments, and he was concerned the company was doing it during the holiday period when banks are often shut.

But Mr Barber denied this and said: "What typically would have happened here is that he would have for a period of time, probably three, four or five months, been regularly paying his bill in full.

"Once we recognise that someone is regularly paying their bill in full, we will shorten the time that they have got to pay a little, and that is what will have happened here."

A simple way to avoid the risk of any late payment charge was, Mr Barber said: "to set a direct debit payment up on the account.

"It is universally good advice to set up a direct debit for at least the minimum amount.

"That way you can make sure you are not going to be hit with any late payment charges, and obviously if you want to pay more on top of that direct debit it is very easy to do so."

Source: http://news.bbc.co.uk/1/hi/programmes/moneybox/4681228.stm

inmypocketnottheirs · 4 February 2006 at 8:11PM

Not forgetting of course that these late payment charges are illegal.

Milarky · 4 February 2006 at 8:22PM

[It's a posting rule to only include a short quote or maybe the title of the piece and the link under it]

Yes that is strange - although I have seen a differential date for minimum/full payments with both the co-op and smile (the same organisation in reality) where you get 10 days longer to make the minimum payments than the full payments and avoid all interest. However this ought to be in the agreement from the outset (if Barclaycard can vary dates in this way). The way the representative describes how they decide to change someone's due date

Once we recognise that someone is regularly paying their bill in full, we will shorten the time that they have got to pay a little, and that is what will have happened here..

..sounds really daft. Why don't they offer people progressively longer interest-free periods where they show a consistency of settlement as a marketing device? They could shorten the IFP for everyone (or everyone new) and this would have virtually no effect on those already on minimum payments (and therefore paying interest)?

Also, they were 'caught out' despite the denials as this clearly isn't a practice they sought to market before a customer fell into the trap...

rwgibson98 · 4 February 2006 at 8:31PM

I too had just seen this on the BBC News website.

I'd fallen victim to this a couple of months ago. After settling into a cycle where the bill was due a week after pay day, so I'd pay it in full on (or just after) pay day, I noticed a statement with a Late Payment Charge item on it.

Re-reading the previous month's bill showed that they'd brought forward the payment date so that I had to pay it before pay day. Whether this was "explicitly outlined" is open to interpretation; it certainly did NOT say "we've brought forward your payment date to try to catch you out".

The story has a happy ending. I phoned up and stated "I'm not paying this charge; if you think I am then I'm taking my business elsewhere". The call centre person referred to his employer as "they" (not "we"), apologised and refunded the charge "as a gesture of goodwill". Oh, and whilst I didn't close my card, I'm now using another for my monthly spending.

I'm somewhat surprised by the language used by Barclaycard's Ian Barber in this piece. I'd expect his HR department to be arranging a meeting on Monday morning...

star1_2 · 4 February 2006 at 8:37PM

Also - just read this BBC article .... thought this is a b****y nerve !!

Anyway - just glad that I'm not with Barclays !, although I'm sure that other card issuers will be considering the same or another "devious trick" to maxamise their revenues !!

thor · 4 February 2006 at 9:53PM

When I signed up to Barclaycard about 8 years ago they had more benefits than any other card at the time. Of course you had to pay for it through higher interest rates but that did not affect me as I always paid off my balance in full. Late last year I finally cancelled my barclaycard account as it had ended up as one of the worst benefit credit cards. This new stealth cost cutting exercise has just confirmed that I was right to get rid of them.

empfun · 4 February 2006 at 11:56PM

This can be quite a shocker for those that are cutting it fine with payment dates. I wonder which are providers are going to follow suit. This is just as well, I was going to cancel my Barclaycard anyway.

rwgibson98 · 5 February 2006 at 9:44PM

Have been mulling this over.

I too had once associated Barclaycard with a certain level of quality/service/product.

Many businesses talk about "organic growth", the concept of selling additional services to existing customers. It's cheaper to sell more to the people who are already happy customers than to try to find new customers to try your products.

Customers remember good treatment, fair value, etc. They also remember when they get screwed.

Barclaycard: I dare you to send me an offer for a loan, insurance, travellers cheques. Do you honestly think that I, or any of the Moneybox listeners, would take an extra product from you now?

Seems a strange way of trying to win more business.

Rikki · 5 February 2006 at 9:48PM

They made some interest out of me in a cunning way last month. :mad:
I had returned an item and the refund obviously not on my bill but was on their system. I asked them for the amount I needed to pay so I wasn't in credit. Paid that figure and they billed me on the next bill for interest. Little sh*ts. :mad:

charlie12 · 5 February 2006 at 10:05PM

Rikki, AFAIK most credit cards work like this with refunds. If you receive a statement with a balance of, say £100, and you then get a refund of £20 after the statement date, that £20 does not count as a payment (they should have mentioned this to you!). So if you only pay £80 by the due date, you will be charged interest on the full £100, even though your balance went to £0 when you paid the £80.

You always have to pay the full amount stated on the bill by the due date to avoid paying interest, even if you have had refunds. This will give you a credit balance and you'll have to make more purchases to get back to £0. This is especially annoying for very large refund amounts as you'll end up with a large positive balance (happens to me a few times but I use Egg Money so it's easy to withdraw positive balances and I get paid interest on it too.)

charlie12 · 5 February 2006 at 10:13PM

Back to the main topic, it is a bad move but I also think that it highlights the point that you should always check statements carefully, never assume that the due dates will be the same/similar to previous months.

You should always be checking your bills and transactions online on a regular basis, so you can see your statement before it arrives in the post. This also helps when statements are late/lost in the post.

And finally a direct debit set up to pay the full amount also helps (though personally I prefer to do things manually - if the DD fails for any reason there's no time to make a payment via BACS/debit card as the DD is taken on/near the due date).

Barclaycard - No Good For People Paying Their Balances In Full

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