You are here: Home - Credit Cards & Loans - News -

Barclaycard payment change could see customers forking out more

Written by:
Barclaycard has announced changes to its terms and conditions from January, which could see some credit card customers paying back more each month.

In emails being sent to customers, Barclaycard confirmed updates to its terms and conditions from 26 January 2021, mean the following:

  • Changes to the way it calculates monthly minimum payments
  • Changes to the interest charged on cash transactions
  • Ban on card use in the gambling sector.

Here’s what you need to know about the changes…

Monthly minimum payments

From 26 January, Barclaycard will use the highest of these three calculations (it will be individual to the customer):

  • 2-5% of a customer’s main balance, plus any instalment plan payments
  • 1-3% of a customer’s main balance plus any interest, default fees or account maintenance fees, in addition to any instalment plan payments
  • £5 or a customer’s total outstanding balance if it’s less than £5. correction: An individual customer’s figures were originally used in the article (3.75%, 2.50% or £5). The article has now been updated with the range of figures customers can expect to see.

Barclaycard confirmed the changes mean that for some, the monthly minimum payment may increase. It said that by paying a little more each month, customers could clear balances sooner and pay less in interest.

As an example, a customer with a £2,500 balance currently pays a minimum £79.42. However, in January, this will rise to £116.92.

However, it added that the majority of customers are already paying more than the minimum amount, so they won’t see any change. It will also exclude customers where, based on their current balance, it would have led to a significantly large increase in their minimum repayments.  

Further, financially vulnerable customers, including those who have already taken a payment holiday, are exempt from these measures.

Cash transactions

For customers who pay their main balance in full (standard, cash and promotional balances that aren’t 0%), plus any instalment plan payments due that month, there will be no interest on sterling cash transactions, such as when you withdraw money using your card in the UK.

Gambling transactions

Barclaycard will block any transactions made at gambling establishments and websites as a result of the Gambling Commission announcement in April 2020 banning credit card customers from these transactions. This means if customers try to use their cards, the transaction won’t go through.

Customers can still use their credit card to buy lottery tickets in retail stores, such as supermarkets.

What Barclaycard customers need to do

Barclaycard confirmed customers do not need to take any action as the changes will be automatically applied from 26 January 2021.

However, if customers feel they may struggle with potentially higher minimum monthly payments, they should contact Barclaycard to discuss payment options.

Alternatively, if customers are unhappy about the changes, it said they can choose to close accounts. It urges customers to do this before 11 January 2021. If a customer does choose this option, they will no longer be able to use their card, but will stay on their current terms and conditions until their balance is paid off in full.

A spokesperson added that other changes are also coming into effect on 26 January:

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape for summer, and moving your cash savings to a higher paying deal is ...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Virgin Money launches £180 wine deal for account switchers

Virgin Money has launched a current account switch deal offering new customers a case of wine worth £180 as well...