Barclay Card Quietly Reduce Minimum Payment

aardvark0

Hi,

I got a Barclaycard a couple of years ago for the purpose of transferring a balance to it fixed at 6.9% for the life of the balance. All of this time I have been paying off the minimum repayment every month, while concentrating on reducing more expensive debts.

Recently Barclaycard told me that they were reducing my credit limit to effectively what my balance was (ie leaving me with no available credit), and removing the facility for me to withdraw cash with the card, all in the name of responsible lending. They send me lots of letters and fanfare, highlighting the responsible lending aspect.

I have no complaints about this - firstly the way I use this card means that these changes don't affect me, and secondly, presumably they make it harder for me to go on a spending binge should I be tempted.

What did annoy me is that this month my monthly payment is less than my spreadsheet had indicated it should be. Lo and Behold, checking the smallprint on the back of the statement, and comparing it to the smallprint on the back of last months statement, the minimum payment has been quietly reduced from 2.5% of the outstanding balance to 2.25% of the outstanding balance for my type of card. (Meaning that if I only ever pay the minimum, I will be paying more interest over a longer period).

I rang Barclaycard to ask how this fitted in with their 'Responsible Lending' campaign, and was informed that this had been done to reward loyal customers!

My own view is that Leopards clearly don't change their spots!

I shall now be making an additional manual payment evey month so as not to pay too much for my 'Loyalty' to Barclays!

Rant over.

firstnameunknown

If you're concentrating on repaying more expensive debts surely it's better to be having to pay less on this one each month? Or have I missed something?

aardvark0

I never even thought of that - but I believe you are correct!

bowlhead99

I am on the 6.9% deal too. The strategy of "paying off the minimum repayment every month, while concentrating on reducing more expensive debts" means that if they put their minimums down even more (say to 0% a month) you should be very happy indeed because the cash you would have given barclaycard can now be given to someone charging you much higher interest!

Of course once you get to the position that all your other debts are on interest-free deals or are paid off, give the barclaycard people some more money (or if the interest free ones are short term, might be better to put the 'spare' cash in your savings account to pay off those other cards when the rates shoot up; 6.9% is not a bad long term rate).

Another thing to note is that you can probably avoid needing to make manual monthly payments to barclaycard anyway. The standard options for direct debit payments are: full balance, minimum payment or fixed amount. If you pick a fixed amount and it doesn't cover the minimum in a particular month, they just take the minimum. So if minimum payment was £100 a month you could still set your direct debit at £125 a month if wanted. This allows you to pay it quicker than the minimum, but not settling the full balance and not having to worry about missing a payment.

oldwiring

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aardvark0 wrote: »

Hi,

I got a Barclaycard a couple of years ago for the purpose of transferring a balance to it fixed at 6.9% for the life of the balance. All of this time I have been paying off the minimum repayment every month, while concentrating on reducing more expensive debts.

Recently Barclaycard told me that they were reducing my credit limit to effectively what my balance was (ie leaving me with no available credit), and removing the facility for me to withdraw cash with the card, all in the name of responsible lending. They send me lots of letters and fanfare, highlighting the responsible lending aspect.

I have no complaints about this - firstly the way I use this card means that these changes don't affect me, and secondly, presumably they make it harder for me to go on a spending binge should I be tempted.

What did annoy me is that this month my monthly payment is less than my spreadsheet had indicated it should be. Lo and Behold, checking the smallprint on the back of the statement, and comparing it to the smallprint on the back of last months statement, the minimum payment has been quietly reduced from 2.5% of the outstanding balance to 2.25% of the outstanding balance for my type of card. (Meaning that if I only ever pay the minimum, I will be paying more interest over a longer period).

I rang Barclaycard to ask how this fitted in with their 'Responsible Lending' campaign, and was informed that this had been done to reward loyal customers!

My own view is that Leopards clearly don't change their spots!

I shall now be making an additional manual payment evey month so as not to pay too much for my 'Loyalty' to Barclays!

Rant over.

I have a balance transfer on my BC at 2.9 percent until debt paid. I phoned them at the beginning and requested they took a fixed amount each month rather than the min. This they agreed to do and I;m sure if you were to phone them they would no doubt accomodate your request to have the same facility.

PJHilder

I pay my Barclaycard off in full each month now so luckily I wont be affected by this.

taxi73

I have a few credit cards and most have put their min payments to 2.25%...I think it said because of the FSA

jinkssick

its the beauty art of profit making and banking i.e. giving your prey a chance to escape, catching it and then completely bludgeoning it to a pulp.

Wilbury

Re Barclaycard.
I have had my limit reduced twice, Dec 2006 after paying in £2k on a account bal of £4k, i paid another £1600 last week after i phoned and asked if there was a problem with my account and if i paid a large amont would they reduce my limit again, Barclaycard stated there wasnt a problem, i paid the £1600 they reduced my limit to £300 immediatley.
I am now in the process of contacting the solicitors of "Which magazine" It annoys me as i am very careful with my cashflow, and had planned to finish of a building project which i was relying on the access to £500.This has seriously impacted my "cashflow" position.
When i explained this to Bcard they said it was part of their responsible lending practices.
I wish someone would setup a web site especialy for this problem, and get this in to the main stream news i think there a lot people out there that have had this problem. name and shame barclaycard!

wub868

Hi I am absolutely fuming mad. I have had a Barclay card visa and a master card for 25 years. I have always paid my interest, some times I have had quite high borrowing, sometimes none, but I’ve always paid and often cleared the balances.



My state of play a few ago was 12K limit on one card, no borrowing at all on it and 10 k on another. During the last few months we have been renovating our house and we decided to put all the purchases on my master card. When the works were complete we were going to see what we had left to pay off some of the balance and slowly pay off the rest over the next few months. We have not missed any other payments on anything such as mortgages etc and should not have any bad credit references.

I started using my Barclaycard master and had reached about 4k, when suddenly my card was refused. I rang Barclay card who told me a letter was in the post and my credit limit and been reduced. When I asked why I was told it was to help me manage my money affairs better!!!!! I said you have given me no warning, just cut me off dead with no spending left, after 25 years of making money on my account and loyal customer and all that.

So the next day I had to buy some renovating stuff and I decided to use my Barclay card visa, which had a balance of £300 and a credit limit of 12k. It was refused and you've guessed it, when I rang them they told me my limit had been reduced from 12 k to £300.

I was and am fuming about this. How is suddenly vastly reducing my credit limits, with no apparent reason going to help me manage my money better? I started the house renovation in the knowledge that I had potentially 15K of credit if I needed it, which was unlikely but part of my decision making. Now I have no credit to draw on, Christmas around the corner, and although I have savings, I would rather have this expense on credit and keep my saving in case of emergency, which is surly, the point of high interest credit cards, short term credit if and when you should need it.

Well needless to say, I will be voting with my feet, I will pay my balance off and close down both cards. I will also move my personnel and business bank account from Barclays Bank. I will never ever have any dealings with Barclays or any of there associated companies for the way they have treated me.

They should be exposed, as it seems from what I read this is happening to lots of others as well. We need a register so others can list there experience and Barclays can get some bad press over this.

As I explained to the Barclays advisor, supposing I was a single parent who was relying on this credit coming up to Christmas, shame on them!