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Barclaycard gives rebates to 1,000s of customers after it 'may have' set their credit limits too high

Barclaycard gives rebates to 1,000s of customers after it 'may have' set their credit limits too high

Thousands of Barclaycard customers will receive rebates of £230 on average, after the firm admitted it had failed to meet "expected standards" for assessing some customers and "may have" set their credit limits too high.

MoneySavingExpert.com reported in August that the credit card provider had written to customers warning some may have been given credit limits that were higher than they should have been. Now thousands are getting letters telling them they'll receive refunds of all interest, fees and charges which were applied to their accounts during the period when their credit limit may have been too high, plus 8% compensatory interest. 

At the moment, you'll only get a rebate if your credit limit may have been set too high and Barclaycard judges that you were negatively affected as a result. But if you aren't given money back and think you should be, you can contact Barclaycard to discuss your case.

For more help on how credit limits work, and what to do if yours isn't right, see our Credit Limits guide.

What went wrong at Barclaycard?

When lenders issue credit cards, they'll set a credit limit, which is the maximum amount they're prepared to lend you on that card. 

Regulator the Financial Conduct Authority says that a credit limit on a card should be affordable, depending on your individual circumstances. So lenders must assess how much you can afford to repay and ensure the credit limit isn't set so high that you'll struggle to make repayments.

But an internal review at Barclaycard earlier this year found that the firm "did not always meet the expected standards for assessing a customer's situation", and not all of a customer's circumstances or finances may have been considered as part of their application. As a result, in some cases customers may have been given a credit limit that was higher than it should have been.

Barclaycard hasn't said how many customers have been affected in total, but it's understood that thousands will get a rebate. 

I'm a Barclaycard customer – what happens next?

Barclaycard says it's conducted an "extensive analysis" of whether affected customers were negatively affected if their credit limit may have been set too high. It's writing to everyone who was not properly assessed, and says most will have received a letter already or will do shortly – you don't need to do anything until you get this letter.

Here's what will happen: 

  • If Barclaycard's analysis shows you were negatively affected because your credit limit may have been too high, you'll be given a refund. The payout will include a refund of all interest, fees and charges that were applied to your account while your credit limit may have been too high, plus 8% compensatory interest. Barclaycard says the average refund will be £230, but of course actual amounts will differ between customers.

    The refund will be applied to your Barclaycard account, if you still have one, and it says in most cases this will reduce existing debt. If you've since closed your Barclaycard account, you'll need to send a 'response form' within 30 days of the date on your letter, telling Barclaycard which account you'd like your refund to be paid to. This form will be sent to you with the letter and a prepaid envelope will be provided for you to send it back. 

  • If Barclaycard's analysis shows you weren't negatively affected even though your credit limit may have been too high, you'll get an apology but no refund – though you can dispute this. If you disagree and think you were negatively affected by your high credit limit, or incurred extra costs as a result of this, you can contact Barclaycard and let it know. Your case will then be assessed individually, and Barclaycard says its letters will have details of how to get in touch. 

What does Barclaycard say?

A Barclaycard spokesperson said: "An internal review of our operating procedures for credit card limits highlighted that we did not always meet the expected standards for assessing a customer's situation, meaning that not all of the customer's circumstances and/or finances may have been considered as part of their application. As such, in a small minority of cases, a limit was set that may have been higher than it should have been at the time."