Barclaycard - Minimum payment reduction.

steveksullivan

On applying for a new balance transfer B/card the minimum monthly repayment is currently quoted at 3.75%. I know there is a planned reduction to 1% due to take effect from 22nd July and that existing cardholders received emails in April(?) notifying them of the reduction.

I phoned their C/Services this morning to confirm the reduction would be 'across the board' but she would not confirm it and said that their internal website said it would apply to 'some customers' and it wasn't clear to her whether that included NEW customers. 

Has anybody got any better information? Preferably someone who has very recently taken out a B/Card and also received the email?

Thanks as always for any replies.

Nasqueron

Barclaycard allow you to set your own payment amount for the DD if that helps, paying minimum even if you are on 0% is a gamble though. Sorry I can't help about the minimum payment

th081

I had the email as a existing BC holder. I would expect it to apply across the board and to new customers. The 'some' is probably a catch all for those on plans etc. be aware it is a double edge sword to catch you out and not benefit you. In reality a minimum 10% per month payment would be better for consumers in the long run 

CliveOfIndia

th081 said:

be aware it is a double edge sword to catch you out and not benefit you. In reality a minimum 10% per month payment would be better for consumers in the long run 

To play devil's advocate, it depends on what interest rate you're being charged.

For a standard interest-charging card then undoubtedly a higher minimum payment benefits the consumer in the long run - they'll pay less interest overall and be in debt for a shorter period of time.

But if you're on a 0% deal and you have savings put aside to repay in full when the promotional deal ends, then a smaller minimum payment is advantageous - you can earn interest on more of your money until the time comes that you need to repay the card.

th081

CliveOfIndia said:

th081 said:

be aware it is a double edge sword to catch you out and not benefit you. In reality a minimum 10% per month payment would be better for consumers in the long run 

To play devil's advocate, it depends on what interest rate you're being charged.

For a standard interest-charging card then undoubtedly a higher minimum payment benefits the consumer in the long run - they'll pay less interest overall and be in debt for a shorter period of time.

But if you're on a 0% deal and you have savings put aside to repay in full when the promotional deal ends, then a smaller minimum payment is advantageous - you can earn interest on more of your money until the time comes that you need to repay the card.

Those who are on 0% and have savings put aside etc are a tiny tiny minority. I did read somewhere UK consumers pay several hundred million in interest a DAY. It would be interesting to see if the 40% overdraft rates have meant less collective usage.

steveksullivan

@th081 I consider myself very lucky but I do fall into that category - hence my original post as I want to minimise my monthly outgoings during the 0% period.

Last call .... anybody taken out the card more recently and had the 'reduction' email?

Royoftherovers2024

It applies to ALL customers from 22nd July 2024, that is The highest of:

- 1% of your balance

OR

 

- 1% of your balance plus interest

OR

- £5

pfpf

is the 1% actually going to apply to all BC cards? i have 5 cards, 3 have had the 1% email the other 2 not.

steveksullivan

Still trying to find a definitive answer from someone who has taken out a card recently AND had the email as Barclaycard themselves do not know .....

BikingBud

steveksullivan said:

Still trying to find a definitive answer from someone who has taken out a card recently AND had the email as Barclaycard themselves do not know .....

Have you had a statement yet?

But if you are going to balance transfer and have selected the card you either have an amount saved to offset against your debt with a small payment or a smaller payment. So you will have minimised your payments, reduced to the smallest possible a mount, whichever way the min payment rate will go. 

Steve64

I also applied for a balance transfer card, and Barclaycard are still charging me 3.75% minimum payment each month.

I was twice advised on their chat service that it was going to be reduced, but on my last two statements its 3.75%.

I've spoken to Barclaycard and they say all the usual things about, each card is different, each customer is different etc. But none have been able to explain why I don't qualify for the 1% minimum payment rate.

The bottom line is I suspect that new customers with good credit ratings who always pay of balance transfers on time are not going to benefit from the low minimum payment percentage. While those struggling to pay off their debt will get the lower minimum payment rate and will end up paying back more interest.