Barclaycard Increasing Minimum Payments

dave2691

I and my wife have received letters from Barclaycard for all our cards stating that minimum payments are to increase from Feb 18 from 0.25% to 2.25%. We have a number of balance transfers, some running to 2019. Barclaycard word it as a big favour to us as we will be able to 'reduce our debts sooner'. The reality is of course that we have effectively taken out a loan on one set of terms and they, having taken the fee for the transfer have changed to a different set of terms making the deal we took out significantly less attractive. I'm surprised this is even legal. It is certainly highly dubious ethically to lend over a certain term then demand the money back early. We can pay back easily but this could put some in difficulty. I think this needs publicising. I'm assuming all Barclaycard customers are getting the same letter?

poggs

hmm.

I've had my barclaycard for 10 years and its always been 2.25%

just moving you onto the standard product as part of the new ring fenced bank malarkey thats coming shortly I reckon.

MABLE

dave2691 wrote: »

I and my wife have received letters from Barclaycard for all our cards stating that minimum payments are to increase from Feb 18 from 0.25% to 2.25%. We have a number of balance transfers, some running to 2019. Barclaycard word it as a big favour to us as we will be able to 'reduce our debts sooner'. The reality is of course that we have effectively taken out a loan on one set of terms and they, having taken the fee for the transfer have changed to a different set of terms making the deal we took out significantly less attractive. I'm surprised this is even legal. It is certainly highly dubious ethically to lend over a certain term then demand the money back early. We can pay back easily but this could put some in difficulty. I think this needs publicising. I'm assuming all Barclaycard customers are getting the same letter?

It has for me always been 2.25% for quite a few years.

[Deleted User]

Are you sure your minimum payment is 0.25%? That would be a very old card, certainly pre BIS regulations.

dave2691

Thanks for the replies. I must admit I hadn't looked but having just checked it seems we have some that are 0.25% and some at 2%. Yes, we have held Barclaycards for a long time and some are cards dating from when Barclays took over other companies. Standardisation is understandable on new transfers but on existing transfers it is just wrong IMHO.
Dave

glentoran99

I'm sure you can refuse the increase, but that will close your account and you will be unable to use the cards

dave2691

Refusing it and paying back a transfer early would make no sense. My question is whether it is legal to change the terms like this once one has paid a balance transfer fee. One is paying for a transfer to be paid back over an agreed period and at a certain rate of interest. Surely that is a contract?
Dave

[Deleted User]

Yes, it's legal.

glentoran99

dave2691 wrote: »

Refusing it and paying back a transfer early would make no sense. My question is whether it is legal to change the terms like this once one has paid a balance transfer fee. One is paying for a transfer to be paid back over an agreed period and at a certain rate of interest. Surely that is a contract?
Dave

they haven't changed the rate of interest, if you are paying the minimum payment then I highly doubt you will have paid the entire sum back by the time the transfer rate runs out

PeacefulWaters

It's a change that try can make my giving you two months written notice.

It's also a change that's thoroughly encouraged by government and regulators.

glentoran99 wrote: »

I'm sure you can refuse the increase, but that will close your account and you will be unable to use the cards

There hasn't been a change to the interest rate. Just the minimum payment. I'm sure your post is inaccurate. Sorry.

chattychappy

dave2691 wrote: »

I and my wife have received letters from Barclaycard for all our cards stating that minimum payments are to increase from Feb 18 from 0.25% to 2.25%. We have a number of balance transfers, some running to 2019. Barclaycard word it as a big favour to us as we will be able to 'reduce our debts sooner'. The reality is of course that we have effectively taken out a loan on one set of terms and they, having taken the fee for the transfer have changed to a different set of terms making the deal we took out significantly less attractive. I'm surprised this is even legal. It is certainly highly dubious ethically to lend over a certain term then demand the money back early. We can pay back easily but this could put some in difficulty. I think this needs publicising. I'm assuming all Barclaycard customers are getting the same letter?

(emphasis added)

I quite agree. Some years ago, MBNA did the same thing to me. At the time, the minimum payment was £5 and they changed it to interest plus 1% (or whatever). Again, it was presented as "helping" me to pay off my debts sooner. Of course, I always had that option anyway - they were retrospectively devaluing the deal I'd taken from me, using the nanny state as an excuse. (The regulatory change didn't apply to existing accounts, but MBNA used that as an excuse).

At the time I made some fuss here, but got very little sympathy. As it happened, my BT was expiring soon so it didn't affect me much.

As to whether it's legal, somehow I doubt it. Although CCs are free to change T+Cs., I believe that a term, or an application of a term that leads to this kind of situation is unfair. Whether you would get any sympathy from a regulator or not, I don't know. With so many people having trouble with debt, anything dressed up as helping people clear their debts sooner might well get through.

By the way, I've had Barclaycards for years and also have never had such a low minimum payment.