Barclaycard increases minimum credit card repayments as major shake-up kicks in

Barclaycard first notified customers in November 2020 that it would change the way it calculates minimum payments, ie, the lowest amount you can repay on your card each month. Customers will see this change on card statements landing from Tuesday (26 January) onwards, which means the first increased payments will be due in late February or March depending on individual payment dates.

Barclaycard won't say how many customers are affected (though most of its cards are - see a full list below) or what the typical change will be. However we've heard from customers who've been told they'll see increases of between 30% and 58% as a result - with one told their monthly repayment will jump from £87 to £137. No one will see minimum payments drop due to the changes. See our Credit Cards guides for full help and our current top picks for 0% spending, balance transfers, rewards and rebuilding your credit score. 

Minimum repayments can be dangerous: the slower you repay, the more it costs

Credit card minimum repayments are typically a percentage of your outstanding debt, so as your debt decreases, so does the amount you need to repay. But this means if you only make the minimum repayment, your debts will last longer than if you were to make fixed repayments each month, and you'll pay more interest overall. Use our Minimum Repayments Calculator to check how long your card will take to repay if you just pay the minimum

That's why for many, having a higher minimum repayment will be a good thing - it means you'll become debt-free quicker. And in fact, if you can afford it and you're paying interest on your credit card now, you should consider repaying even more, as the quicker you repay, the less it costs.

If you can afford it, consider switching to making a fixed repayment that's higher than the minimum repayment, in order to pay your debt off quicker. You can also check if you can cut repayment costs with a balance transfer. See more info in our Credit Card Minimum Repayments guide.

Until now, Barclaycard's min repayments depended on when you got the card

Until Tuesday 26 January, Barclaycard customers had standard repayment levels, based on when they opened their account:

• If you opened your account between December 2010 and on or before 25 January 2021, the minimum you had to pay each month was the highest of 2.25% of your balance, 1% of your balance plus interest, or £5.

• If you opened your account before December 2010, it was the highest of 2.25% of your balance, 0.1% of your balance plus interest, or £5.

From this week, many will have higher, personalised minimum repayments

The changes to minimum repayments affect both new and existing customers with Barclaycard's Forward, Platinum, Cashback, Freedom (formerly Initial and Littlewoods), Hilton Honors and Barclaycard Rewards cards - though not its Premier, Barclays Infinite and Woolwich cards.

Barclaycard first alerted affected customers in November, and billing statements with new minimum repayment calculations started arriving on Tuesday. Your minimum repayment will be personalised to you - Barclaycard hasn't explained exactly how this is done, but it's told individual customers what they'll have to pay. If you're unsure of your new rate or you've mislaid the info, check your statements. You can also contact Barclaycard's customer services.

If you pay the minimum amount automatically by direct debit, Barclaycard says it'll adjust this for you with payments taken from the end of February onwards, depending on your billing date. If you pay a set amount by standing order or fixed direct debit, you may need to adjust it to ensure it covers your new minimum payment.

While exact repayment levels vary, for customers who are affected by the changes it will now be the highest of:

• 2% to 5% of your balance (exact percentage depends on the customer). This is based on your main balance, and doesn't include any instalment plan payments which you must also make each month. 

• OR 1% to 3% of your balance plus interest (exact percentage depends on the customer). Again, this is of your main balance, and doesn't include any instalment plan payments, default fees or account maintenance fees you must also make each month. 

• OR £5, or the total outstanding balance if this is less than £5. This is already the case now and isn't changing.

Back when Barclaycard first announced these changes, we were emailed by at least a dozen affected MoneySavers - some of whom said they were shocked by the changes, even if higher repayments do ultimately mean you'll pay off debts faster. Here are a few of the reactions we saw on social media: 

What to try if you can't afford the minimum repayment increase

As stressed above, for many higher repayments will be a good thing - so if you can afford to make them, it's best to do so, or even pay more. Yet for some the hike in repayments is a problem - for example, if you'll struggle to pay the extra each month, or if you're repaying multiple cards and the Barclaycard isn't the most expensive (a golden rule of repaying debt is to always focus on the debts at the highest rate of interest - if necessary you should focus on clearing these first and only make minimum repayments on the others).

If you're unhappy with the minimum repayment increase, you should: 

• Complain to Barclaycard. You can contact it via online banking, the app or by calling 0800 151 0900. Explain that you can't afford higher minimum income repayments, and see what it'll do to help. It's worth noting it's said your minimum payment won't go up if it would mean a "significantly large" increase to repayments – and it hasn't quantified that.

• Check if you can cut repayment costs with a balance transfer. This could help if you pay interest on your credit card currently. A balance transfer's where you get a new card to pay off your existing debt, and then owe the new card instead, often at 0% interest – meaning all your repayments will reduce your debt rather than paying off interest. For full info and our current top pick cards, see Balance Transfer Credit Cards. Also see our Free Debt Help guide if you're struggling. 

Technically, you were also able to reject the T&C changes and close your account but the deadline to do this was 11 January 2021. 

Late payment fees are also changing and gambling blocks have been added

The changes to Barclaycard's minimum payments are part of a wider shake-up of its T&Cs on most of its cards, which will also come into force on Tuesday 26 January. Under the new terms:

• You won't be charged interest on UK cash withdrawals, as long as you pay off your balance in full. Until 26 January, you paid interest on sterling cash transactions – for example, if you used your credit card to withdraw cash from an ATM in the UK – as soon as they were added to your account, even if you paid off the balance in full by the payment due date.

  But from 26 January, you'll only be charged interest for cash withdrawals on any outstanding balance from your last statement, and this interest will be charged at the same rate as your usual spending on your credit card.

• If you go over your credit limit, you won't be charged a fee or lose any promotional interest rate. Before the changes, you were charged £12 every time you bust your credit limit.

• You'll only be charged late payment fees a maximum of four times a year, and won't lose any promotional interest rate. You'll still be charged a £12 fee if you miss a payment, pay it late or pay less than your minimum amount – but you'll only be charged it up to four times a year, meaning you won't pay more than £48 in late payment fees annually.

• You won't be able to use your Barclaycard for any kind of gambling transaction. If you try and use your card at a gambling establishment or on a gambling website, it won't go through.