Barclaycard cuts minimum repayment on credit cards

CompareTopCards.co.uk
Barclaycard extended to some of its customers a lower minimum repayment - 1.5% Vs. the prior 2.25% of the remaining balance. This will give some of its customers additional flexibility in these tough economic times. A Barclaycard spokesman said: "We are doing this to help customers. This is an option we are giving to selected customers for them to be able to make a reduced minimum repayment for a limited period if the customer chooses to do so. We understand that some customers may appreciate this additional flexibility during the current economic circumstances."

While this may help these customers in the short term or those having 0% deals, lower minimum repayments are the way credit card companies build up interest charges and keep customers in debt longer. We advise Barclaycard customers to only make these minimum repayments if they absolutely cannot afford to make higher payments. As far as possible customers should avoid making minimum repayment.

• At a minimum repayment of 1.5% if your credit card interest rate is higher than 19.6%(apr) the repayments do not even cover the monthly interest carges on the credit card, which means the credit card balance keeps increasing without any additional charges on the card.
• A cardholder with £5,000 at an interest rate of 15.9 per cent, making the current minimum repayment, will take 31 years to repay the debt with interest charges of £5,900.

Use our interest charge calculators to understand the cost of making a minimum repayment.