In July 2020 Barclaycard sent out letters to some customers saying their credit limit may have been set too high.
We’ve recently reviewed the way we set some of our customers’ credit limits and can see that the limit we gave you previously may have been higher than it should have been at that time.
We are sorry this happened and recognise that this may have had an impact on your circumstances, or you may have incurred losses.
Some people aren’t being offered a refund, many are being offered £75. But if you go back and explain why the high limit caused you problems you may be able to get more.
MoneySavingExpert has been told that Barclaycard is paying out an average refund of £230 to customers for these errors. If that is the average, some people will get a lot more!
How much is “too high”?
You may have been pleased when Barclaycard increased your credit limit. But a large limit isn’t good if you then struggle to make the minimum payments.
And only paying the minimum amounts traps you in credit card debt for a long while.
If you have had letters before from Barclaycard warning about “persistent credit card debt“, that is another sign your balance may be too high.
The Financial Conduct Authority (FCA) who regulates banks and credit cards, says that a lender should check a higher credit limit is “affordable” before they increase it.
By affordable, they mean that you could afford the repayments without having to borrow more money or get behind with bills. And also that you will be able to afford to pay more than the minimum sometimes so you aren’t trapped in debt.
Should you phone them?
Barclaycard suggests you phone them on 0333 202 7490 if you would like to talk to them about this. That number is genuine, this isn’t any sort of scam.
If you are happy with your card and don’t feel that making the minimum payments has been difficult, you don’t have to do this.
But if paying your Barclaycard has become very hard as the limit is too high and the balance never seems to drop, you can call them and ask them to help you.
Think what to say & what to ask for
It’s good to start by saying that you have had this letter and you agree the credit limit was too high for you.
It can help to say what has actually happened to you. Here are some typical problems other people have had:
“Paying the credit card bill sometimes leaves me so short of money I have to put my food shopping on a credit card.”
“I didn’t want to miss a Barclaycard payment so sometimes I haven’t been able to pay my council tax.”
“I keep worrying every month about how I can juggle money to make the Barclaycard payment.”
“My debt never seems to go down and I can’t afford to pay more.”
You can also say that Barclaycard should have known you would have difficulty:
“If you had looked at my credit record you would have seen I had a lot of other debt and this was increasing”
“My credit record would have shown missed payments and defaults to other debts”
“I had only been paying the minimums for ages before you increased my limit – that should have warned you I wouldn’t be able to manage a higher limit.”
“I don’t know why you increased my limit when you could see there was a lot of gambling on my card.”
You can then ask them to put right the problem they have caused. For example;
- give you a refund of the interest you have been charged after they increased the limit.
- agree to freeze interest so your payments start clearing the debt much faster, but say this shouldn’t show as a payment arrangement on your credit record as it is Barclaycard’s fault the balance is too high.
“My lender hasn’t written to me”
You don’t have to wait until the credit card admits they got your limit wrong – you can send an affordability complaint in yourself.
Read How to complain a credit card limit was too high. That has a template letter you can use – it’s easy so you don’t need to use a claims company.
You can use the same approach to argue a catalogue, store card or overdraft limit was increased to it was unaffordable,
UPDATE – Barclaycard is increasing many people’s minimum payments in January 20210
In November Barclaycard has sent out a lot of emails telling people their T&Cs are changing. Hidden in this dull-sounding email, which many people may not read, is the bombshell that their minimum payments are going up. See Barclaycard to hike minimum payments in January – are you affected? for details of what will be happening.