Barclaycard warning: Customers may have to pay back more monthly due to change in terms

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Barclaycard is a popular and familiar name when it comes to credit cards, with the bank providing support to millions of Britons. Barclaycard allows people to apply for a credit card, manage this, and access their online banking to ease purchasing processes for customers. However, just like any other provider, there are terms and conditions to bear in mind, and an upcoming change could affect some customers.

From January 26, 2021, Barclaycard has announced it will be altering some of its terms, and has advised customers to pay attention.

The provider will be changing the way it calculated monthly minimum payments, as well as the interest it charges on cash transactions.

As such, some Barclaycard users will have to confront a change to how they currently view their payments.

And some may be required to shift these upwards to meet the new terms outlined by the bank.

For monthly minimum payments, Barclaycard will now use a tripartite measure, selecting the highest of three calculations.

These will be: 

  • £5, or a customer’s total outstanding balance if less than £5
  • 3.75 percent of a customer’s main balance, plus instalment plan payments if any
  • 2.50 percent of a customer’s main balance, account maintenance fees, interest, default fees, plus instalment plan payments, if any.

The majority of customers will not see any changes to their account, the provider has said.

This is due to the fact many are already paying over the minimum monthly payment amount.

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However, for some this will mean an increase in payments.

This may not be bad news for customers, as slightly higher repayments are likely to mean a balance is paid off sooner.

In addition, interest is less likely to be as high, potentially helping Britons to manage their payments in a better way.

Other changes which will be coming into effect on January 26 relate to fees charged.

Customers have usually been required to pay a £12 fee for every month they made a late payment, but new terms mean this will only occur four times a year at maximum.

A £12 fee was also charged when Britons exceeded their credit limit, but this will now be removed. 

In addition, there is also a change in terms to cash transactions that it is worth paying attention to.

Individuals who pay off a balance in full in addition to any instalment plan payments they have, will not have to meet any interest on cash transactions in Sterling.

Finally, Britons will no longer be able to use their cards to gamble – either in person or through websites.

The only exception to the rule is lottery tickets, which can still be purchased in store. 

Customers will not need to take any action on the matter, but if they are struggling with repayments, they are encouraged to reach out to Barclaycard.

The impacts of COVID-19 mean many are struggling, and as such lenders have been instructed by the Financial Conduct Authority (FCA) to provide as much support as possible. 

Earlier in the month, the FCA proposed to extend payment deferrals to credit card and personal loan customers.

Its guidance suggested those who have not yet had a payment deferral will be eligible for two deferrals of up to six months.

Those who have taken out one payment holiday already will be entitled to an additional freeze of up to three months.

However, this must be arranged in a formal process to avoid a bank perceiving a break as a default. 

Express.co.uk has contacted Barclaycard for comment on the upcoming changes to terms. 

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