Barclaycard minimum payment increase

Rupert_Bear

These newbies!

Paulgonnabedebtfree

Hop75 wrote: »

Bit of an update for anyone who's interested.

After Saturday's discussion with the lady at Barclaycard, I spoke to her line manager who promised to look into this and call me back today at 2pm. Being an inpatient sort I decided before lunch to call Barclaycard myself.

I spoke to a very helpful lady who confirmed a 5% increase in my APR, which I already knew about, but no increase in min monthly payment. And the penny dropped. Despite me being very careful to refer to the min monthly payment during my original conversation on Sat, it seems likely that the first lady I spoke to somehow got confused and was actually looking at the notification of the 5% APR increase and read it as an increase in min monthly payment to 5%.

To be absolutely certain about all of this, and having not received a call back from the team manager, I called Barclaycard a second time this afternoon and the person I spoke to again confirmed the 5% APR increase but no change to min monthly payment.

Needless to say I am much happier now that 48 hours ago, although I'm still slightly baffled, not to say alarmed, how the first lady got so mixed up.

I'll keep an even closer watch on my statements over the next couple of months than usual, but the other positive upshot in all of this for me is that I spent quite a lot of time reading other postings in the forum and it's actually been quite inspirational.

Consequently I now know exactly how much debt I have, literally to the nearest penny. It's been a relief too to know that many other people are in the same boat and that many of us, myself included, are making good progress. I've paid off a significant amount over the last two or three years and continue to do so. Funnily enough the Olympics seems to be a target, in terms of clearing debt, highlighted by many and it has been for me for some time now.

Keep your chin up.

Well that sounds like a more realistic explanation. I was quite concerned that some of the lenders might be jacking up their minimum payments - which would have blown my plans for debt repayment out of the water. Don't misunderstand me. I do make extra payments above the minima when I can afford to. Whenever I do this, it goes to whichever debt happens to have the highest interest rate at that time. Indeed, give it a couple of years and I will probably be paying 5%+ to my highest interest debts totally voluntarily. I just made the last payment on my vehicle loan. That will free up some money for repaying other debts. I won't start tackling them in earnest just yet though as there is a big service and MOT early next year. At the moment I will put the loan money aside for that. Plus my income usually takes a dip in Winter.

[Deleted User]

The OFT's recommendation for compulsory higher minimum payments was one of the things the industry fought against (and was successful). The original recommendation was a 10% min payment across the board, which would have crippled a lot of people. So thankfully, not everything in the new regulations got through...

But do bear in mind that they can increase you min payments, but they are generally wary of doing so.

Paulgonnabedebtfree

Deleted_User wrote: »

The OFT's recommendation for compulsory higher minimum payments was one of the things the industry fought against (and was successful). The original recommendation was a 10% min payment across the board, which would have crippled a lot of people. So thankfully, not everything in the new regulations got through...

But do bear in mind that they can increase you min payments, but they are generally wary of doing so.

I don't know if this went through or not but I do recall seeing something about the minimum being the interest, charges + 1% of the debt being a new minimum minimum payment each month (if that makes sense ). Obviously most lenders are already charging more than this so it wouldn't cause them to raise their repayments. However, my Halifax card charges just 1% each month - then the interest is tagged on. It sort of works because I'm on a low interest LOB deal with them. Each month I pay £80+ (slowly reducing) and they tag on (currently) about £45 - £48 interest. Not good I know for a debt of £8k+ but I'm wondering if the minimum payment might go up on this one to 1% + monthly interest. I could carry this if it's just one lender that does it and/or the others only added a small bit to the minimum. No point me throwing extra at this one just yet as I have other debts that have a higher interest rate.

[Deleted User]

Paulgonnabedebtfree wrote: »

I don't know if this went through or not but I do recall seeing something about the minimum being the interest, charges + 1% of the debt being a new minimum minimum payment each month (if that makes sense ). .

You're right. 1% plus interest and fees is the new standard, so that balances can't increase as long as the card isn't being used.

So you may need to look at your outstanding debts and check all the t&cs to see when who is changing what. Obviously everything chages by 1 Jan. It makes avoiding late fees etc even more critical, as you will pay them as you incur them.

chattychappy

Deleted_User wrote: »

You're right. 1% plus interest and fees is the new standard, so that balances can't increase as long as the card isn't being used.

Not noticed that. With MBNA, my minimum is still interest + £10 (or some such). Since I'm on a promotional deal, that's way less than 1% - and the balance still goes down each month.

I shall resent it if regulation means that MBNA can no longer offer me the deal they want to offer and I can no longer accept the deal I want to accept.

Hop75

For what it's worth my understanding of the new consumer credit legislation, which is being taken up voluntarily by the card industry, is that minimum payments on existing accounts will not change. This is deliberately to protect people who might face hardship if they were subjected to having to pay more. I'm not totally certain re the date, I think it's with effect from Jan 2011 where possible, but only new accounts will be subject to an increase in minimum payment, which is where the +1 percent alluded to above comes in.

For more info check out the documents on the Dept of Business & Innovation website (under closed consultations) - there's both a plain English summary doc and the full report on the consultation, which was published earlier this year.

Paulgonnabedebtfree

Hop75 wrote: »

For what it's worth my understanding of the new consumer credit legislation, which is being taken up voluntarily by the card industry, is that minimum payments on existing accounts will not change. This is deliberately to protect people who might face hardship if they were subjected to having to pay more. I'm not totally certain re the date, I think it's with effect from Jan 2011 where possible, but only new accounts will be subject to an increase in minimum payment, which is where the +1 percent alluded to above comes in.

For more info check out the documents on the Dept of Business & Innovation website (under closed consultations) - there's both a plain English summary doc and the full report on the consultation, which was published earlier this year.

Thanks for that info re the +1% issue. I hadn't realised that it was new accounts only. It does make more sense that way. Although one issuer imposing this wouldn't have hurt me too badly (a total monthly increase of around £45 at current debt level), I appreciate that an extra £45 could have finished some people off.