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Barclaycard payment change could see customers forking out more

Paloma Kubiak
Written By:
Paloma Kubiak

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.

YourMoney.com 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:

  • Changes to the late payment fee. Where customers were previously charged £12 for every month there was a late payment, after this date the fee will only be applied a maximum of four times a year
  • Changes to the overlimit fee. Where customers were previously charged £12 each time they exceeded their credit limit, this fee will be removed
  • Customers will receive up to a 56 day interest free period on cash transactions as well as purchases.