BARCLAYCARD 6.9% 'for life'

talkmoney

Hi Has anyone else had a problem with this? I telephoned BCard yesterday to carefully go through the whole deal before I made a decision to transfer from other cards. One of the questions I asked was: what was the minimum repayment each month (the amount I was transferring was around £7123.00). The lady I spoke to told me it would be £18.00 - £20.00 minimumpayment - I have this written down so I know this is what she said. (We were then going to set our own amount of monthly repayment) I then went ahead with the deal. Today I telephoned BCard to ensure that our existing direct debit amount would cover the £18-£20 minimum payment). I was told that our minimum payment is £160.00 per month!! He said we will be charged at a rate of 2.5% per month. Once I'd stopped shrieking with horror he told me it would obviously decrease every month as the capital amount would be decreasing. I was told that the lady I spoke to was wrong. I assumed the 'life' meant as long as we wanted it to last. This doesn't seem to be the case. Does anyone have any comments on this?

[Deleted User]

'Life' means the balance will be charged at that rate for as long as you have it. You still need to make at least the minimum payments for the duration.

Seems the original agent you spoke to made a mistake, although the correct min payment calculation would be detailed in the documentation.

BTW - the Bcard min payment is 2.25% a month.

opinions4u

Sounds like she divided the correct amount by 10 in error.

But surely you could see £20 a month was going t be way below the minimum payment because:

1. You were already paying miles more on your old card and
2. Basic maths tells you that £240 a year is about 3% of your debt, so lower than the rate being charged.

You might get a £25 ex-gratia payment out of them. But I can't see you getting a cheaper payment.

I assumed the 'life' meant as long as we wanted it to last.

This doesn't mean they'll forever let the debt increase.

talkmoney

Thanks Everyone for your replies.
My original BCard balance (before I transferred out and then back in again) was about £4000 and the min payment was £15.00 per month.
I thought the 2.5% fee was a one off payment to take advantage of the deal and that I would then decide how long I needed to pay it off, (including of course the annual 6.9% interest) and that would then determine the monthly amount.
Many thanks for your comments.

SammenForLivet2

Out of courtesy, what's wrong about a 2.25% minimum payment? It gets the balance down more quickly, meaning you pay less interest.

You can of course, move to a provider that only requires a minimum repayment of 1%, but it may be hard to obtain such a high limit and quite a few are now changing to 2.25% minimum repayment, as they call it 'Responsible Lending'.

Yes, the lady may have miss-informed you, but ultimately, the terms and conditions do normally over-rule, unless you have it in writing. I would think that you would be lucky to get a £25 ex-gratia payment.

But this is just my opinion and apologies, if it sounds slightly harsh - it's not intended.

chattychappy

macfamilyent wrote: »

Out of courtesy, what's wrong about a 2.25% minimum payment?

In my book, the ideal minimum payment would be nothing at all (impossible of course). You would then be free to take however long you wish to pay back the balance. If you are paying higher interest elsewhere, then you'd pay down those balances first. My income is very irregular - so in the past lower minimum repayments have suited me, even though on average I've paid well above the minimum.

In general, the lower the repayments, the better the value you extract out of the initial fee.

macfamilyent wrote: »

It gets the balance down more quickly, meaning you pay less interest.

But that's not necessarily what you want... If the rate is right, you may be happy to pay more interest for a loan that lasts longer. And you are always free to pay more than the minimum.

Incidentally, one way of maximising value out of a BT deal is to put a little spending onto the card - up to the amount of the minimum repayment. Ideally you do this just before the statement is generated and make your minimum payment just afterwards. You will pay minimal purchase interest and with the positive payment hierachy your repayment will hit the purchases first. This has the effect of freezing your original BT amount at its original value. Whether it's worth doing this depends on what other debts (and their APRs) you have. Of course if you have no other debts then it would be better to put purchases onto another card in order to get the usual "up to 56 days" interest free on purchases.