Barclaycard Payment Plan Request - even though minimum payments have been made?

DustyMartin

Hi
My mum has been contacted by BarclayCard and they have asked her to set up a payment plan. My mum has a debt of around £13K and has always paid the minimum amount off each month and sometimes even more. She has never missed a payment.
BarclayCard have said that if she does not contact them they will suspend the card and she may have to pay the whole amount off. They have suggested in the letter she could get a loan to pay the credit card off.
Has anyone else experienced this from BarclayCard and if so what did you do? Is this legal for BarclayCard to encourage my mum to take out more debt?
thanks
Dusty

MallyGirl

It is as a result of her being in 'persistent debt'. Providers have been told they must address this and not just keep taking the interest when people are just paying the minimum. She will need to agree to start paying more so that she actually reduces the debt and doesn't just tick along.

[Deleted User]

It's a good suggestion for her to look at a loan - if she can get one, it would almost certainly be a lower rate, although she would need to ensure she can manage the monthly payments.

D3xt3r5L4b

They want their money back. Simple. Making the minimum payment each month isn’t getting it back quick enough for them. 

cymruchris

If she pays the minimum payment forever - that debt is going to take an age to come down - and some more. If the option of a loan is available that might be a sensible solution - but she’d have to ensure she didn’t then go and build up further debt ‘thinking she can afford the payments’. 

MinuteNoodles

As was mentioned at the start, it's due to the new rules around persistent debt which the credit card companies now have to adhere to. As you say she has quite a significant amount and it's barely reducing because she makes minimum payments so is the very definition of persistent debt. 

Shakin_Steve

DustyMartin said:

Hi
My mum has been contacted by BarclayCard and they have asked her to set up a payment plan. My mum has a debt of around £13K and has always paid the minimum amount off each month and sometimes even more. She has never missed a payment.
BarclayCard have said that if she does not contact them they will suspend the card and she may have to pay the whole amount off. They have suggested in the letter she could get a loan to pay the credit card off.
Has anyone else experienced this from BarclayCard and if so what did you do? Is this legal for BarclayCard to encourage my mum to take out more debt?
thanks
Dusty

They can't force anyone to pay any more than the contractual minimum payment, so don't be intimidated by that part of the statement. Suspending the card sounds like it might actually be a good idea, at least that way she can't spend any more. 

With regards to the loan, she is not being encouraged to take on more debt, just one debt replacing another, but make sure she doesn't agree to making higher monthly payments than she can afford, should she decide to go down that route. At the moment, even with only paying the minimum, she is staying on top of her obligations. If she defaults on loan payments, that would be a much worse situation, in my opinion.

https://www.moneysavingexpert.com/credit-cards/persistent-debt-help/

MinuteNoodles

Shakin_Steve said:

They can't force anyone to pay any more than the contractual minimum payment, so don't be intimidated by that part of the statement.

They can close the account and demand immediate payment of the outstanding balance. It's in the terms and conditions of pretty much every credit card. 

Shakin_Steve

MinuteNoodles said:

Shakin_Steve said:

They can't force anyone to pay any more than the contractual minimum payment, so don't be intimidated by that part of the statement.

They can close the account and demand immediate payment of the outstanding balance. It's in the terms and conditions of pretty much every credit card. 

Would you care to post those T&C's? I don't believe they can vary a contract as long as the contractual minimum payment is being made.

Shakin_Steve

They can close the account and pass the debt to a recovery company, but they must abide by the original terms.

[Deleted User]

Shakin_Steve said:

MinuteNoodles said:

Shakin_Steve said:

They can't force anyone to pay any more than the contractual minimum payment, so don't be intimidated by that part of the statement.

They can close the account and demand immediate payment of the outstanding balance. It's in the terms and conditions of pretty much every credit card. 

Would you care to post those T&C's? I don't believe they can vary a contract as long as the contractual minimum payment is being made.

Barclaycard

If you or we close your account, we will not move your interest rates in line with the Base Rate. You won’t be able to make any further transactions on your account after you tell us to close your account, and you must repay us your outstanding balances within a reasonable period

See also page 24 allowing them to close the card.

You do realise the card is given as a choice of the lender who can withdraw it if they like, right? They can close the card and demand full repayment without issue.