Options re Barclaycard 5% interest rate rise

peter312

Hi all

I have received my latest Barclaycard statement advising me that they are putting up the interest rate on my card from 17.9% to 22.9%.

Apparently, though, I am "in control" and whilst they "would love" me to "stay with Barclaycard" I "may prefer to close" my "account because of this change". They say that if I decide to close the account, they will charge interest at the current rate until the balance has been cleared.

Please would someone confirm what they mean?

Do they mean I have to repay the account straight away (which is my understanding of the term "close the account") or do they simply mean I cannot use the card anymore but can repay the amount outstanding on a monthly basis (subject to the usual minimum monthly payment).

I did speak to an Indian gentleman called Edward (really?) at their call centre who seemed to confirm it was the latter but I would like to make sure before I make the wrong decision.

I am in the process of paying off all of my credit cards and frankly do not mind if I lose the use of the card. I just cannot afford to repay the balance all in one go and I have no intention of opening any new replacement cards.

If anyone can advise me about this, I would be grateful.

Many thanks

Peter

CLAPTON

it means you can choose to keep the current interest rate; have no further use of the card and continue to pay at least the minimum until the balance is zero when the CC will be closed.
It's a new(ish) regulation that all CC that increase their APRs must offer all the users the option to reject the increase and 'close' the card

lisyloo

The latter.
You don't have to accept the new deal on offer, but if you do it will an end to further credit on that card.

Your current deal still stands so you can pay it off under the old terms.

BugsyBrowne

peter312 wrote: »

Hi all

I have received my latest Barclaycard statement advising me that they are putting up the interest rate on my card from 17.9% to 22.9%.

Apparently, though, I am "in control" and whilst they "would love" me to "stay with Barclaycard" I "may prefer to close" my "account because of this change". They say that if I decide to close the account, they will charge interest at the current rate until the balance has been cleared.

Please would someone confirm what they mean?

Do they mean I have to repay the account straight away (which is my understanding of the term "close the account") or do they simply mean I cannot use the card anymore but can repay the amount outstanding on a monthly basis (subject to the usual minimum monthly payment).

I did speak to an Indian gentleman called Edward (really?) at their call centre who seemed to confirm it was the latter but I would like to make sure before I make the wrong decision.

I am in the process of paying off all of my credit cards and frankly do not mind if I lose the use of the card. I just cannot afford to repay the balance all in one go and I have no intention of opening any new replacement cards.

If anyone can advise me about this, I would be grateful.

Many thanks

Peter

Lol you spoke to a indian gentlemen called edward absolute classic,why do these indian call centre employes have to change their names,they need to learn how to conduct a proper sentence in good english first.

peter312

Thank you for the replies.

If I don't accept the new deal, will I definitely be able to continue on the same minimum payment or is there a chance I will required to pay back more per month.

As you can see, I don't trust them.

Cheers

chattychappy

Usual practice is that they just let you pay off under the current terms. I've not seen any reports of minimum payments being upped after a cardholder has asked to close the account in order to keep the current rate.

The regulations only empower them to require a cardholder to pay off "in a reasonable time" (or some such - I'm on a slow connection and cannot check the exact wording).

Main things to watch are:

1) get your decision in quickly and follow the method they have given you. There is a deadline. As you say you don't trust them, you might want to do it by registered post/special delivery (whatever it's called these days).

2) Make absolutely sure that any Continuous Payment Authorities (eg household insurance, card protection plans etc) are cancelled with the suppliers concerned. Failure to do this could "bring the account back to life" and then the rate would be upped.

lisyloo

Make sure any insurance payments are set up elsewhere and go through properly (I mean actively watch out for them and check your statements).

Insurers are being very risk averse at the moment and they will cancel the insurance of people who don't pay very quickly with very little notice (usually after 2nd failed payment to be fair).

If this happens you have to declare you've had cancelled insurance due to non payment forever and this will make it difficult and expensive to get insurance for a very long time, possibly the rest of your life, so it's really not worth taking a chance with, so I'd advise making special efforts with insurance payments.