Barclaycard interest hike! from 17.9% p.a. to 22.9% p.a

jmb1

Anyone else just had this email? I've had to use my Barclaycard heavily recently with my partner on maternity leave and this is going to hit me hard until i can pay the balance off. What a hike!

Here's the email:

We are writing to let you know about a change to the interest rates on your Barclaycard account.

We may change our interest rates if there is a change in our costs, including those relating to funding, the risk of lending and of operating your account.

Your standard rate (including purchases) will increase from 17.9% p.a. to 22.9% p.a. Your cash withdrawal rate will remain unchanged.

Any existing promotional rates that you have on your account will stay the same.

What it means for you
The new rates will apply to your account after your August statement. They will show for the first time on your September statement and your minimum payment may also increase.

As an example, for every £100 that you borrow, this will cost you an extra £0.36 per month.

What you can do next
If you decide not to accept the new interest rates, please call Customer Services on
0844 811 9111* by 31st August 2012. Your account will be closed and you can pay off your balance as normal at your current rate.

There is a factsheet available if you would like more information on the changes. You can find it by visiting UKCA - Re-pricing guide and going to the bottom of the page.

Kind regards


Paul McWeeney
Head of Consumer Sales and Service

ILW

As the letter says, you can reject the new rate if you wish. What is the problem?

jmb1

Without stating the obvious, if I had the money available to pay off the balance... well i wouldn't have the balance. That's the problem.

ILW

jmb1 wrote: »

Without stating the obvious, if I had the money available to pay off the balance... well i wouldn't have the balance. That's the problem.

You do not have to pay off the balance, you just go on making payments as before.

molerat

Reject the increase and pay down the balance at the current rate in your own time.

jmb1

I wont have a credit card to use then though, which as I say I'm relying on currently.

Look I realise my options, my point was how can these institutions justify such dramatic hikes?

fozmcfc

£3.60 extra a month per £1000 isn't a massive amount surely.

You are currently relying on it, well there is probably your answer, they see you as a higher risk to lend money too.

tonyh66

they have to cover their LIBOR fine

ILW

jmb1 wrote: »

I wont have a credit card to use then though, which as I say I'm relying on currently.

Look I realise my options, my point was how can these institutions justify such dramatic hikes?

Sorry, but if as you say you are needing further borrowing just to pay for daily living expenses, you are obviously high risk. This could well be the reason for the hike in rates. I would guess that you have been making on or near minimum payments for a while, which has flaaged up the situation.

[Deleted User]

The rates is variable and they're varied it. And as always, those who make their repayments need to pay for those who run off and don't pay. And if you rely on your credit card, then it positions you as a higher risk.

It's 36p per £100 you owe. What's your current balance?

jmb1

I started this thread to highlight a price hike, which to me seems extravagant, but it seems everyone thinks it acceptable and are defending Barclays, albeit that they see me as a greater risk. And no, I've been paying it off with large amounts far higher than minimum payments.