@barclaycard Barclaycard monthly minimum payments

[Lesret]

For some time now I have noted that Barclaycard incorrectly under quote my Barclaycard monthly statement interest rate.

 

If I then pay the quoted monthly minimum payment as shown on my statement I find that next month my outstanding balance has actually " INCREASED ".

 

I would have thought that this was not only a failure under Barclaycards own terms and conditions but is illegal.

 

This underhand practice by Barclaycard must be adding millions to their bottom line when you also take into consideration the added compound interest to customers Barclaycard accounts.

 

Any comments advice or similar experiences by other Barclaycard customers appreciated.

Edited July 4, 2012 by Lesret

[slick132]

Hi Lesret and welcome to CAG

 

If the a/c balance is high enough, paying only the minimum payment may well mean the balance increases month on month because the payment doesn't cover the interest being added to the a/c.

 

There is a warning on the statement saying, "If you only pay the minimum payment each month, it will take you longer and cost you more to clear your balance."

 

I doubt BC are acting illegally as all the banks have to comply with agreed standards set by the FSA.

 

If you are experiencing Financial Difficulty, you can ask BC to stop adding interest for a while, to enable you to reduce the capital balance. See here - http://www.consumeractiongroup.co.uk/forum/content.php?557-Letter-for-an-application-for-consideration-for-hardship

 

The banks make a great deal of money from credit cards but it's up to you to recognise and take whatever steps you can to reduce how much they benefit from your a/c.

 

[Lesret]

Thanks for the responce.

 

Under the Terms and Conditions of Barclaycard the minimum payment is to cover both the account interest for that month plus a percentage reduction of the total balance.

The minimum payment should always give an account balance reduction NOT an increase.

 

If the minimum payment is only paid each month it will naturally take longer and cost more to clear the balance but should NOT result in an increased monthly account balance

if only the minimum payment is paid into the account, the minimum payment is an option to pay both monthly interest and a percentage of the account balance.

 

Paying the minimum is NOT an option to increase a customers account balance.

 

Now if Barclaycard round down the interest rate for a particular month which seems to be there systemic policy as an example from £12.50 down to £12.00 and a customer then pays

the minimum payment 50 pence less than what it should be, but the correct ammount as quoted on the statement as an minimum payment the account balance will increase as an result of Barclaycard under estimating the interest.

 

Now if you take that further and increase this by half of the Barclaycard customers some 4.32 million and add the compound interest it adds millions to Barclaycards bottom line.

 

Barclaycards response to date has been " well we round down the interest to help customers who are having difficulty in meeting the minimum payments ", all of which is in total breach of there own terms and conditions and is indeed illegal and to say the least is a nice little earner on the backs of minimum payment customers.

 

I will keep you updated following completion of enquirys by the FSA as this systemic undercharging goes back as far as 2008.

Edited July 4, 2012 by Lesret

[Lesret]

Update.

 

Due to the very large customer complaints being received by the FSA and the FOS in relation to both Barclays and Barclaycard there is an Minimum of Eight weeks delay on processing customer complaints.

[Lesret]

Update 2.

 

I recently received two letters from Barclaycard neither providing a response to my complaint but confirmation that it will take longer for them to respond to my original complaint.

[KJD]

I came on here looking for a thread about this (it's been YONKS since I was last here!)

 

I'm in the same position - minimum payment does not cover the interest being charged for the following month.

 

I've come across a linkie for The Lending Code which appears to say the it's the card company's responsibility to ensure the above doesn't happen.

 

http://www.lendingstandardsboard.org.uk/docs/lendingcode.pdf

 

See section 129 onwards. I am assuming this is an up to date Code.

 

I'll be interested to hear any updates you have.

[Lesret]

Update 3.

 

I have just received a reply from Rachael Bell Customer Relations Manager Barclaycard Leicester.

 

My original complaint was "why after paying the minimum payment as shown on my Barclaycard statement I find that next months statement shows a balance increase".

 

Well the response from Barclaycard was the neatest avoidance to my complaint I have ever seen, the response listed eveything from 2% interest on the balance and how the additional interest is added but totally failed to respond to my original complaint.

 

As the FOS is dealing with my complaint there contact at Barclaycard being:

Mr Tony Shaw

Barclays Bank Plc

Cadarn House

Croescadarn Close

Pentwyn

Cardiff

CF23 8FF

 

I will now wait for the outcome from the Financial Ombudsman Service.

 

As a matter of interest to any other Barclaycard Customers who have a similar experience with minimum payment balance increases in addition to the FOS a MP David Mowat is asking customers to contact him

about there experiences at:

 

Robert Hancock

 

Office of David Mowat MP

 

Member of Parliament for Warrington South

 

House of Commons

 

SW1A 0AA

[slick132]

Good stuff and keep us posted please.