Barclaycard increasing interest rate the same month as increasing credit limit

Rosebud66

I have just got a letter today from Barclaycard telling me that they are increasing my interest rate from 16.9% to 18.9%. They say the reason is there is a change in their costs, including the funding, risk of lending and operating your account. I have never made a late payment on this account and only once, a few years ago had an over credit limit charge. My balance on this card is £3850, and currently the credit limit is £3940 so I am almost maxed out, however just a week before I got this letter I got another letter saying they are increasing my credit limit by £1,500 from the end of February, and funny enough the increased interest rate kicks in from March. Is this standard practice or am I right in thinking they are trying to squeeze more money from me? I haven't called them because I can never understand them with their Indian accents over the phone.

I am unemployed and have been for over a year, during this time my barclaycard credit has gradually increased every time I came close to being maxed out, and it has gone up by over £3000 in the last year, and now again it's going up. Almost all the purchases on the credit card are groceries and car repairs not luxuries, and I am really struggling paying off the minimum payment each month out of £71 a week jobseekers allowance. Surely barclaycard must look at the bank account of anyone they are lending to and they should see I have no money coming in, yet I somehow feel I am being pulled deeper and deeper into a mess of debt with them. Now I know I can refuse credit limit increases, but to me that is like saying to an alcoholic here take this bottle of vodka I will lend it to you, but don't drink it, of course they will take it. I have been a slave to credit cards since the age of 15 when I was somehow given a Topshop store card, and after getting this letter today I can't help thinking barclaycard must know I am struggling and want me to struggle more, anyone else have any advice non-judgemental if possible?

stephane_2

So....the more they give you....the more you spend!! You need to control yourself & live within your means if you cannot afford the repayments. Sorry but that's your own fault!

YorkshireBoy

The answer is very simple. You tell Barclaycard you're unemployed*...and have been for over a year.

No more credit limit increases then. If you can't do it, let them do it for you.

And are you seriously suggesting that they've increased your limit from £940 to £3,940 in the space of 12 months?


* There's possibly something in your account T&Cs that says you should (must?) inform them if there's a change in your financial circumstances.

chanz4

I think its been harsh on the op, I agree with him the bank should allow limits on demand

_Andy_

Presumably though OP you would have been screwed as without the credit card you wouldn't had access to any funds?

brettcta

Newbie poster in 'I don't like that answer' shocker

Savvy_Money

There's been more reporting done on this thread than by the KGB! Going back to the op's issue I would like to find out why on earth they were given a topshop store card at 15. Was it in the OP's name because this would be against financial regulations in offering credit to a minor? The op recognises they have a problem and I would suggest they go to the debt free wannabe pages where they can seek support and assistance. But seriously folks this person is a newbie and I don't think !!!!!! is helpful.

Elena_Handcart

Hello Rosebud66,

I just thought I would try to bring this discussion back on track, and try and offer you a response to your first post.

I think you hit the nail on the head - when you said that you are already struggling to pay back the minimum payment on your current balance on £71 a week. Add to this the problem that your interest rate is increasing, then you are already going to be struggling as soon as that interest rate rise starts to hit.

I know it seems hard to do - but you must say NO to the limit increase. If you start using this additional credit, then this will most definitely send things over the edge. I perfectly understand how you liken it to handing an alcoholic a bottle of wine to look after (I have experienced practically all the addictions there are to be had). But, I think you yourself know that this would be the wrong course to take, otherwise you wouldn't be on here writing about your frustrations & how this is making you feel. You will not be addicted to spending on credit - it is just that it will temporarily feel like some of the pressures have been lifted, and you are able to get the box of tea bags, or pint of milk; where before you might have been scrabbling around your purse/wallet looking for any available cash. BUT - this is only a short term release of pressure, and will only lead to longer term hardship as you will be paying even more of your JSA to Barclays in interest payments.

PLEASE, PLEASE, PLEASE contact Barclays and ask them to return your credit limit back to as it was. If you are feeling brave enough - I think I am right in saying - you can tell Barclays that you are not willing to accept the interest rate rise, and they have to keep you on the original APR. However, by doing this you will be saying that you will no longer be using the card, and they have to keep that interest rate whilst you pay down the balance and close the account. Although this would be the best thing to do in an ideal world, I do not know your full circumstances, and you may not be able to do this.

Always keep in mind, that as long as you hold a balance on the Barclaycard - you will be paying them a large percentage of your JSA every month. Everytime you get a statement, and you see £20/30/40 charges in interest - then that is money leaving your bank account every month. It doesn't feel like it, because it all mixes into the overall balance that you owe - but believe me, it is leaving your bank account just as surely as tho you are walking into Barclays Bank and handing over the notes.

Good luck with your choices - I hope this has helped to give you some clarity.

Take Care
E_H

dealer_wins

Rosebud66 wrote: »

I have just got a letter today from Barclaycard telling me that they are increasing my interest rate from 16.9% to 18.9%. They say the reason is there is a change in their costs, including the funding, risk of lending and operating your account. I have never made a late payment on this account and only once, a few years ago had an over credit limit charge. My balance on this card is £3850, and currently the credit limit is £3940 so I am almost maxed out, however just a week before I got this letter I got another letter saying they are increasing my credit limit by £1,500 from the end of February, and funny enough the increased interest rate kicks in from March. Is this standard practice or am I right in thinking they are trying to squeeze more money from me? I haven't called them because I can never understand them with their Indian accents over the phone.

I am unemployed and have been for over a year, during this time my barclaycard credit has gradually increased every time I came close to being maxed out, and it has gone up by over £3000 in the last year, and now again it's going up. Almost all the purchases on the credit card are groceries and car repairs not luxuries, and I am really struggling paying off the minimum payment each month out of £71 a week jobseekers allowance. Surely barclaycard must look at the bank account of anyone they are lending to and they should see I have no money coming in, yet I somehow feel I am being pulled deeper and deeper into a mess of debt with them. Now I know I can refuse credit limit increases, but to me that is like saying to an alcoholic here take this bottle of vodka I will lend it to you, but don't drink it, of course they will take it. I have been a slave to credit cards since the age of 15 when I was somehow given a Topshop store card, and after getting this letter today I can't help thinking barclaycard must know I am struggling and want me to struggle more, anyone else have any advice non-judgemental if possible?

Its really simple. Tell them you do not want the increase in either the limit, or the interest rate.

If your income allows it make the highest monthly payment you can.

If on your current income you cannot afford even the minimum payments, then you need to contact their financial difficulty section and explain this, and agree a way forward.