Change to minimum payments on Barclaycard

ukbilly

I recently received a letter from Barclaycard stating that because my payments over the past year have been close to the minimum, they have reviewed my account and my new minimum will be interest plus 0.25% of outstanding balance, or £5 (whichever is greater).

This will apply automatically unless I tell them that I don't want it. I'm curious about that. The letter only says that should I accept the new terms it will take longer to pay off what I owe. Does any of this have deeper implications that I'm missing? For my credit rating, for example?

Moggles_2

We don't know how any given lender views our credit files, but if you have not settled the statement balance over the last 12 months, this could indicate over-commitment to other providers, whether or not you accept Barclaycard's offer.

The important thing, IMO, is not to part with more interest charges than necessary. Unless you have a 0% or LOB low rate deal with B'card, that rolling balance must be costing a fortune.

I'd concentrate on paying off as much as possible each month. Clearing this debt ASAP will reduce the interest you pay and you'll be building a better credit history in the process. This, in turn, reduces the risk of interest hikes and credit limit cuts from B'card and your other cc providers

binaryuniverse

Could do with them offering me something like this for a few months to give me chance to clear my overdraft.

opinions4u

ukbilly wrote: »

The letter only says that should I accept the new terms it will take longer to pay off what I owe.

But if you pay more than the minimum payment then it will make no difference.

Does any of this have deeper implications that I'm missing? For my credit rating, for example?

No direct implications. If you choose to only pay what will now be a lower minimum payment then your debt will decrease slower. This could inhibit potnetial borrowing in future.

My advice would be to pay more than the minimum payment and get your debt down faster.

Hope that helps.

ukbilly

opinions4u wrote: »

My advice would be to pay more than the minimum payment and get your debt down faster.

This is what I'm planning. I've had the card for about 8 years and for the first 6 nearly always paid off in full each month. Mostly I only used it for online buys for the added protection over a debit card. In the past two years I haven't had as much regular p/t work whilst I do my graduate studies so I have used it much more.

I suppose my worries stem from the fact that the letter was framed in language such that Barclaycard were helping me out. I suspected that there might be more in it for them over and above the extra interest payments but I'm working again so I have no intention of prolonging this.

McFilly

I have had one of these letters too. I have a 6.9% rate on this card for the life of the balance and I have just been paying the minimum. I can't help but feel that this is their way of trying to get more out of me because I'm on a low rate. Having said that, the reduction in minimum payments will help but obviously they are gonna gain more from it in the long run.