Martin Lewis warns of 'under-the-radar' change by UK's biggest credit card provider

Martin Lewis and image of someone looking worried on phone while holding credit card and statement

Martin Lewis has warned Barclaycard is changing its minimum repayment rules

Jessica Sheldon

By Jessica Sheldon

Published: 24/04/2024

- 10:26

Updated: 24/04/2024

- 11:07

Martin Lewis said Barclaycard's decision to cut minimum repayments could leave borrowers paying double the interest

Money saving expert Martin Lewis has issued a warning about upcoming changes to Barclaycard's minimum repayments.

From July 22, the credit card provider will be reducing the minimum monthly payment requirements.

In an email to customers, Barclaycard is understood to have said the change will provide "more flexibility with your monthly payment" and added the move is intended to "ensure customers are treated as fairly as possible".

The Money Saving Expert founder said the move could substantially increase the amount of interest a borrower pays as well as the time it takes them to repay their debts.

The financial broadcaster said: "This is a worryingly under-the-radar change by the UK's biggest credit card provider.

"Changing minimum repayments looks innocuous, even trivial – most customers will, I suspect, have ignored it.

"Yet this seemingly technical and bland change is a huge danger signal."

Lewis went on to warn that, for those who only meet the minimum repayments, it could double the total cost of debt by the time it's paid off.

He said: "I wish I could light up the sky with neon signs shouting that, for those unaware, if paying interest on their credit card debt, it can easily DOUBLE the total cost of debt by the time you clear what you owe, meaning you pay £100s or £1,000s more.

"Minimum repayments have always been credit card firms' secret weapon. Letting people repay little looks appealing – hence why Barclaycard says this is about 'flexibility'.

"Yet it takes flexibility to kick your own backside, and this will hurt some just as much."

The minimum monthly repayment on most Barclaycards, including Avios, Platinum and Rewards, is the highest of 3.75 per cent of the balance, or 2.5 per cent of the balance plus interest, or £5.

The Forward card is the highest out of 4.25 per cent of the balance, three per cent of the balance plus interest, or £5.

From July 22 this year, the new monthly minimum repayment amount on all Barclaycards will be the highest of one per cent of the balance, one per cent of the balance plus interest, or £5.

Assuming an APR of 24.9 per cent, which is the typical Platinum rate, paying off a £1,000 Barclaycard debt by paying the current monthly minimum would take nine years and eight months, and the total interest would be £699, according to calculations by Money Saving Expert.

Under the new rules, it would take 19 years and three months, with interest paid totalling £1,655.

Lewis added: "Barclaycard's reduction, for many, from 3.75 per cent of the balance to one per cent of the balance – means while people's repayments will cover their interest, they will clear far less of what they owe, prolonging the debt, keeping people indebted year after year after year, and the interest racking up year after year after year.

He went on to urge all Barclaycard customers to take note of the change and check if they only pay the minimum repayment requirements.


Man looks worried at credit card and phone

Most credit cards waive interest on spending if the money is paid back in full and on time by the due date


"If so, unless you've other, even costlier debt you're clearing first, if you can't afford to repay in full each month, try to make a fixed monthly repayment based on what you can afford – even if it's the same amount as your current minimum – rather than letting your repayments decrease as you owe less.

"This can radically reduce the length you're in debt and the interest cost.

"The more you can repay, the less interest you'll be charged."

Usually, credit cards waive interest on spending if the money is paid back in full and on time by the due date.

If a person opts to pay the minimum repayment or less than the full amount, the amount owed is carried over to the next month and interest will be charged on the whole balance until it's repaid - unless it's a zero per cent credit card deal.

Barclaycard customers can choose to continue to pay more than the minimum each month should they wish to do so.

A Barclays spokesperson said: “We regularly review our products and from July, some Barclaycard customers will see changes to their minimum monthly payments, alongside adjustments to the APR

"Customers will benefit from a reduction in their minimum monthly repayment and the vast majority have no change to APR, while some will receive a decrease.”

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