Barclaycard News Update: Barclaycard Change Ts&Cs
Barclaycard news update: Following the publication by the Bank of England stating that the Bank Rate would remain low, Barclaycard are changing their Ts&Cs.
“Just days after the Bank of England’s new Governor, Mark Carney, indicated that the Bank Rate would remain low for the forseeable future, Barclaycard has written to some of its customers changing their terms and conditions.
Cardholders with rates that “track” the Bank Rate have been told that from September 1 they will instead be “put on variable interest rates”.
In other words Barclaycard’s link with the key rate – which has fallen by more than five percentage points since the onset of the banking crisis – has been broken, giving the card issuer freedom to increase its rates at will.
It is not clear how many of Barclaycard’s total 10m customers are affected, but those whose contracts include the tracker term are expected to be longstanding customers who have held cards for five years or more.
The lender says those affected are a “minority”. Barclaycard will not disclose the rates these borrowers pay, though it is expected they are lower than the rates charged to other cardholders, and The Telegraph is aware that in some cases the tracker rates are as low as 10.5pc. This is unusually low for a credit card rate. The majority of Barclaycard accounts available to new applicants today come with an interest rate almost twice as high, typically 19pc.
There is no explanation of why the change is being made although the letters do point out the alteration comes “at a time when the Bank of England’s Base Rate is at an all-time low.” The Bank Rate plunged from 5.75pc in mid-2007 to 0.5pc in March 2009 where it has since remained.
Tracker rates on both credit cards and mortgages, agreed before the precipitous plunge in the Bank Rate, have become a nightmare for lenders who have sought to wriggle out of their “tracking” obligations wherever contracts permit.
Bank of Ireland UK is the latest lender to become embroiled in this controversy: earlier this year it increased the “differential” by which the mortgages of almost 13,000 borrowers tracked the Base Rate.”
For more information on the products and services offered by Barclaycard, contact them directly and speak with a member of their customer services department. The phone lines are populated with friendly and helpful employees who can assist both new and existing customers with their enquiries.
This article was originally found at The Telegraph.
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