Any idea how Barclaycard's 2.25% repayment pans out long-term

w81

Hi, I have been trying to run this through various spreadsheets but can't get my head round it. Wanted to get some independant thoughts about how Barclaycard now seems to calculate how monthly total/principle payment.

It used to be and with others that you'd be paying 1% of the total outstanding debt plus the month's interest and charges on top. I think some news stories I have read that the gov now required there to be the 1% repayment componant.

But on ringing Barclaycard to check how a BT will pan out, seems that it is now that the principle sum (the amount you pay back) will always total 2.25% of the total outstanding debt, but inside of this are the interest and charges. So the guy on the phone said that out of that 2.25% take out the interest and charges, and then you are left with the figure that is actually deducted from the total debt.

So take an example: My wife has a £4088.88 balance, the principle monthly amount she pays to Barclaycard is £92.00 (2.25% of bal). But as she has a monthly interest rate of 1.87% (17.9APR) that's made up of £76.46 interest and only £15.54 debt repayment.

That example is my understanding of this. But another thing is that £15.54 is well below the 1% repayment that I thought the govt required.

Have I got something wrong there? Have called up Barclaycard for myself, and my wife has also called re her account and they say the same.

Thanks, Will

YorkshireBoy

w81 wrote: »

But another thing is that £15.54 is well below the 1% repayment that I thought the govt required.

As I understand it, the main requirement is that the minimum payment should at least cover the interest charged on the statement.


Barclaycard have ensured they comply with this by saying...


2.25% of the balance, or interest, fees, & charges plus 1%, whichever is the greater.

grumbler

w81 wrote: »

...But on ringing Barclaycard to check how a BT will pan out, seems that it is now that the principle sum (the amount you pay back) will always total 2.25% of the total outstanding debt, but inside of this are the interest and charges.

Is it not easier just to check the information (summary box) on the website or in the paperwork?

Minimum repayment The highest of:
1. 2.25% of the amount you owe us on your monthly statement;
2. £5 (or the entire amount if less than £5);
3. any interest, account fees and default charges that have been added to your account since your last statement plus 1% of the remaining balance.

So take an example: My wife has a £4088.88 balance, the principle monthly amount she pays to Barclaycard is £92.00 (2.25% of bal). But as she has a monthly interest rate of 1.87% (17.9APR) that's made up of £76.46 interest and only £15.54 debt repayment.

I think in this case the min payment is ~2.87%, not 2.25%.

w81

Thanks both for this, I was worried about it and wanted some clarification particularly on the govt requirement part. Cheers, W

jamesperrett

Barclaycard's minimum payment has always been higher than some other card providers in my experience. I seem to remember that Lloyds also had a higher minimum although it is a few years since I had one of their cards.

zerog

Of course, you can always pay MORE than the minimum.

jamesperrett wrote: »

Barclaycard's minimum payment has always been higher than some other card providers in my experience. I seem to remember that Lloyds also had a higher minimum although it is a few years since I had one of their cards.

Lloyds and most companies excepting Barclaycard are 1% min £5.

Tesco and Nationwide are 1% min £25.