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Why is Barclaycard increasing minimum payments?

Why is Barclaycard increasing minimum payments?
Image source: Getty Images.

Do you have a Barclaycard? If so, you could face higher credit card payments going forward. But why is Barclaycard changing its minimum payment rates, and how do they affect you? Let’s take a look. 

What are the new payment terms?

The changes affect your minimum payments. The minimum payment is the smallest amount you can repay on your outstanding balance each month. 

How was it calculated before?

It came down to when you opened your account. For many customers, the minimum payment was the highest of 2.25% of the full balance, 1% of the balance with interest, or £5. If you opened your card before December 2010, the terms varied slightly. 

How will it be calculated now?

Well, customers can expect a personalised minimum payment level. It’s impossible to say exactly what you’ll pay, but it could be the highest of:

  • £5 (or the whole balance, if it’s less than £5)
  • 1% – 3% of the balance plus interest (this doesn’t include your monthly fees, such as default fees or card maintenance costs. You still need to make these separately)
  • 2% – 5% of the balance (again, not including any instalment payments or fees)

You’ll need to check directly with Barclaycard to confirm what you’re paying because it varies widely. Remember: Barclaycard tailors your minimum payment to your account. These are simply estimates. 

When do the new rules apply?

Your new minimum payment will be calculated from your next payment on or after 26 January 2021. So, if you’ve got an outstanding balance on your credit card, you could see a change to your minimum payment from this month. 

If you’ve chosen to pay the minimum each month by direct debit, Barclaycard should adjust this for you. However, if you pay a ‘fixed’ direct debit or standing order, check to make sure it’s enough to cover the new balance.

If you’ve applied for a payment holiday, check with Barclaycard to see if the changes affect you, and when. 

Which Barclaycard customers are affected?

It depends on which credit card you have. The changes apply to the following cards:

  • Barclaycard Rewards
  • Cashback
  • Freedom (formerly known as Littlewoods and Initial)
  • Hilton Honours
  • Platinum 

So if you have an Infinite, Premier or Woolwich card, you’re unaffected for now.

How do higher minimum payments affect customers?

Well, here’s what Steve Wiley, CEO at Monva, had to say about the consequences. 

“It’s actually a responsible thing to do to help with increasing the speed in which debt can be repaid, but bad timing given the pressures people are facing with repayments in the current environment.”

So, on the one hand, higher repayments mean you’ll pay off the outstanding balance a little quicker. This might be a good thing because it could help you manage your debt and free up credit for other essential purchases.

On the flip side, some customers might struggle to find the extra cash each month for the higher repayments. This could have a knock-on effect across their finances as a whole, especially during the pandemic when money’s tight for many of us, anyway. 

What if I can’t afford to pay my Barclaycard repayment?

Good question. If you can’t meet the new minimum payment amount for your account, you have two options:

  • Complain to Barclaycard and see if there’s anything they can do to help. There’s a chance they’ll offer you a more flexible payment plan if you can show it’s necessary.
  • Consider switching to a 0% balance transfer credit card. This might be an option if you’re paying interest on your Barclaycard balance, but balance transfers are not suitable for everyone.  

Are there other changes I should know about?

Yes. From 26 January 2020, you:

  • Won’t be charged for exceeding your credit limit 
  • Can’t use your card for a gambling transaction, which helps you avoid debt 
  • Won’t pay interest on cash withdrawals from UK ATMs (if you repay the balance in full)

So, while the new monthly payments are disappointing for many customers, there are some positives to bear in mind. 


Unfortunately, it doesn’t look like any Barclaycard customers will see a drop in their minimum repayments. That said, for many customers, higher repayments are a good thing in the long term, because they’ll clear the balance quicker.

However, if you’re struggling with the new terms and may end up missing repayments, contact Barclaycard in the first instance and have a chat with Citizens Advice about your options. 

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