Barclaycard changing their minimum payments

foxy-stoat

mro wrote: »

That doesn't always help because some/many are probably paying low or minimum payments because they can't afford to pay more.

Forcing people to pay more will trigger problems elsewhere for some or many.

If the person balance transferring say £5000 to Barclaycard and cannot afford anything but the minimum payments then they already have problems that wont be fixed by BTing, all they are doing is be parking the debt until the deal runs out.

PixelPound

mro wrote: »

That doesn't always help because some/many are probably paying low or minimum payments because they can't afford to pay more.

Forcing people to pay more will trigger problems elsewhere for some or many.

If they can't afford more, then it means they are in persistent debt, and are doing little more than servicing the debt. Forcing up the payments may get the debt down for some who are just no good with money and just pay all their bills first and then survive on the rest. For others who can't afford are struggling then it may nudge them into seeking help.

What would you prefer the status quo and have someone paying minimums for 20 years and not really made a dent into the debt?

Ergates

mro wrote: »

I don't know it's this because the card has zero balance & was paid off in early May.


Then again the card was an old Barclay Mastercard, converted to a Visa card in May 2016 when Barclaycard scrapped their Mastercards, but still with the ridiculously low minimum payments on balances & therefore balance transfers of 0.25% plus interest, so only 0.25% on 0% balance transfers during interest free period.


This was my best card & I would make minimum payments of 0.25% on 0% balance transfers for up to maybe 18 months.

It's likely still related to the new FCA persistent debt rules - some lenders are changing the minimum debt "rules" so that customer don't fall into the persistent debt category even if they keep only paying the minimum.

elleJay42

I got an email from Capital One years ago that really put only paying the minimum into perspective for me, I'd been paying the minimum for probably close to 10 years and then respending what little money was freed up by it. The email told me that by paying the minimum it would take 23 years 10 months to pay off the £1500 debt I had and by finding an extra £11 a month it would be gone in 3 years! I wish they'd brought this in a long time ago, I might not have spent so long in debt

foxy-stoat

elleJay42 wrote: »

I got an email from Capital One years ago that really put only paying the minimum into perspective for me, I'd been paying the minimum for probably close to 10 years and then respending what little money was freed up by it. The email told me that by paying the minimum it would take 23 years 10 months to pay off the £1500 debt I had and by finding an extra £11 a month it would be gone in 3 years! I wish they'd brought this in a long time ago, I might not have spent so long in debt

Simply maths would of done that - if you looked at the amount of interest they charged on the balance and deducted that from the minimum payment, that would of told you how much you how much you were paying off the actual debt, divide the 2 numbers and that would of given you the number of months it would of taken to clear, assuming you paid the same amount.

Capital One are one of the higher interest cards, not the highest though.

CakeCrusader

Sorry, I don't mean to be rude, but there are repayment calculators online which will tell you how long it will take for you to repay your credit card if you only pay the minimum balance; https://www.moneysavingexpert.com/credit-cards/minimum-repayments-credit-card/ Paying the minimum will cover the interest and probably a tiny bit of your balance, nothing more. Paying more than the minimum will cover the interest and more of what you owe, so you'll clear your your outstanding balance off faster. Credit card companies do usually say that it's unwise to pay just the minimum as it will take you longer to clear the balance, and they've been telling customers this for a long time, well before the new rules were brought in.

Ergates

CakeCrusader wrote: »

Credit card companies do usually say that it's unwise to pay just the minimum as it will take you longer to clear the balance, and they've been telling customers this for a long time, well before the new rules were brought in.

Which is a very significant thing because - this is how they make their money. When the people who make maximum profit when you only pay minimum are telling you it's not a good idea, you should probably listen.

mro

foxy-stoat wrote: »

If the person balance transferring say £5000 to Barclaycard and cannot afford anything but the minimum payments then they already have problems that wont be fixed by BTing, all they are doing is be parking the debt until the deal runs out.

Yes, they are in debt & short of money.

Increasing payments won't necessarily solve problem for that person if they don't have the money.

mro

Ergates wrote: »

It's likely still related to the new FCA persistent debt rules - some lenders are changing the minimum debt "rules" so that customer don't fall into the persistent debt category even if they keep only paying the minimum.

The minimum payment rules have never changed on any of my cards ever in 30+ years.

Can they do this ?


Who else is changing their minimum payment rules ?

[Deleted User]

Yes, they can do this.

The last large change was 2010/11 when all new cards and most existing portfolios went to 1% plus fees and interest.

All lenders are doing this.