“I urge all Barclaycard customers to take note of this.”
Martin Lewis has issued a warning to anyone banking with Barclays.
The finance expert spoke out after Barclays lowered minimum monthly repayments for some customers.
“We want to let you know that we will be changing the way minimum repayments are calculated on Barclaycard from 22 July 2024,” the bank's email read.
“This means the minimum amount you pay each month will drop. We're making these changes to give you more flexibility in how much you pay each month.”
Around 80% of people with a Barclays account will see their minimum monthly repayments reduced.
However, Martin Lewis warned the public that it was not as good as it seemed at first glance.
“Minimum repayments have always been the secret sauce of credit card companies. Getting people to pay back very little can look attractive – which is why Barclaycard says it’s about ‘flexibility’. However, kicking yourself in the ass requires flexibility sex, which will also hurt some people,” he said via The Independent.
“For many people, the Barclaycard's interest rate has been reduced from 3.75 per cent to 1 per cent of balances, meaning that while people's repayments cover their interest, they are paying off much less of their debt, thus It prolongs debt and keeps people in debt year after year, with interest rising year after year.”
Lewis' website MoneySavingExpert.com calculated that at the Platinum card rate and a debt of £1,000, it could take almost 20 years and £1,655 in interest to pay off the debt if the new minimum was paid.
Before the changes, this took less than ten years and required interest payments of £699.
Lewis said: “I urge all Barclaycard customers to be aware of this and check immediately that they have only paid the minimum amount.”
“If so, unless you have other, even more expensive debts to clear first, if you can't pay them off in full every month, try to make a fixed monthly payment based on what you can afford – even if it's the lowest amount you can afford Same – instead of having your payments decrease as you owe less.
“This can radically reduce your debt term and interest costs. The more you can repay, the less interest you'll be charged.”
A Barclays spokesman said of the new system: “We regularly review our products and from July, minimum monthly repayments will change for some Barclays card customers, as well as annual interest rates. .
“Customers will benefit from lower minimum monthly repayments and the vast majority will see no change to their APR, although some will see a reduction.”
Related Links:
Martin Lewis warns drivers 'don't do it', says 'it's fraud'
Martin Lewis fan has £35,000 extra in bank account after following his advice
Martin Lewis gives urgent advice on how to save hundreds on easyJet flights
Featured image credit: Money Bright/Flickr
#Martin #Lewis #issues #warning #Barclaycard
