Barclaycard delays plan to charge risky clients more
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Your support makes all the difference.Barclaycard announced today it is suspending plans to move customers on to risk-based pricing for at least four months.
The group said that although it remained committed to the pricing system, under which people who are considered to be high risk are charged higher interest rates, it was delaying the process until at least June to help customers.
It also announced a raft of initiatives to help people who get into financial difficulties, including launching a new helpline for customers who are concerned about their financial situation to get advice.
The group is also using data shared by other credit card providers to predict when people may be getting into difficulty.
It will contact customers who look like they are heading for problems to offer advice before they miss a payment.
It will also reduce the credit limits of borrowers showing signs of financial stress, as it believes it is not in people's long-term interests to borrow more money when they get into difficulties.
The group has committed not to contact customers who miss payments for up to two months if they are working with a money advice group to sort out their financial problems.
The move is in line with a set of fair principles credit card providers agreed with the Government, which include giving borrowers warnings about rate increases and giving more breathing space to people struggling with their debts.
The guidelines were developed followed a credit card summit held by Consumer Affairs Minister Gareth Thomas in November.
At the summit he warned credit card providers that he would ask the Office of Fair Trading to investigate the sector if they did not make a strong commitment to treating customers fairly.
Barclaycard, which has 11.9 million customers, is also reducing the interest rate charged on purchases for at least three million of its customers with low-risk profiles, slashing them by between 2.5 per cent and 5 per cent during the course of the year.
New customers will also benefit, as the group has reduced the rate it charges on its Barclaycard Platinum product, its most popular card, and its Barclaycard OnePulse, which combines a credit card, contactless payment card and Oyster card, by 2.5 per cent to 12.4 per cent.
Antony Jenkins, chief executive of Barclaycard, said: "We recognise that 2009 is going to be a difficult year for many people and we want to do what we can, when we can, to help Barclaycard's customers.
"Today's announcement will assist millions of our customers and we are determined to support them further, in innovative ways, over the coming months."
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