Martin Lewis issues Barclaycard warning over 'worrying under-the-radar change'

Mr Lewis wrote: "Barclaycard customer? WARNING, it's cutting your minimum repayment, this sounds trivial but it could DOUBLE the total interest you repay. Full details, my analysis and help here." From 22 July 2024, Barclaycard is reducing the proportion of debt many of its customers have to repay as the monthly minimum.

The change means that it will now typically take you a DECADE longer and cost you nearly £1,000 more than it did before to clear a £1,000 debt. Mr Lewis 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.

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"Yet this seemingly technical and bland change is a huge danger signal. 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. Barclaycard's reduction, for many, from 3.75% of the balance to 1% 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."

"I would urge ALL Barclaycard customers to sit up, take note of this, and check now if you only pay the minimums. 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."

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