01-02-2011, 08:19 PM
Direct Action Resistance Fighter
Joined: Aug 2006
Barclays customers sent round the bend in 30% 'rip-off'
Quote:BARCLAYCARD is under attack after informing hundreds of thousands of customers that interest charges are set to rocket by up to 20 per cent next month.
The credit card group, part of banking giants Barclays, is being accused of profiteering from the easiest of targets, those struggling with credit card repayments.
But despite the heavy criticism, Barclaycard describes the exercise as a “business as usual process”.
Jasmine Birtles, who runs consumer advice site moneymagpie.com, said Barclaycard had “declared war” on its customers by forcing upon them annual percentage rates of up to 29.9 per cent, a figure more usually associated with widely criticised store cards.
Ms Birtles said: “It seems it’s a business as usual process for Barclaycard to rip off its customers. I can see no other reason for Barclaycard doing this to its customers other than wanting to claw back money. The bosses have clearly thought they want bigger profits to boost their own multi-million-pound bonuses and they’ve decided to grab it from the people who are the easiest to get it from and most vulnerable.
“My advice to anyone receiving a letter like this from Barclaycard is to vote with their feet and move to another company, many of which are offering good, long, zero per cent periods right now.” One Barclaycard customer, who wishes to remain anonymous, said: “I pay more than the minimum payment every month and I often pay the entire balance off. My circumstances haven’t changed and my credit rating remains good. Yet, I just received a letter from Barclaycard telling me my interest charges were going up by more than 20 per cent. It’s tantamount to theft.”
A spokeswoman for Barclaycard said: “This is a business as usual process for us. We review and adjust the interest rates on a proportion of our customers’ accounts each month.
“What has changed is that we now communicate these changes via letter to customers at least 60 days before the increase is applied to the account, whereas previously the change was communicated on customers’ statements.”
Barclaycard would not declare how many had been affected by the leap in interest rates but did confirm it was a small percentage of its 11.1 million customers in the UK, meaning that even if just one per cent had received the letters at least 111,000 customers had been affected.
Ms Birtles also questioned the timing of Barclaycard’s money-grabbing letters: “These letters are arriving on people’s doorsteps just after Christmas,” she said. “It appears to me as if Barclaycard has waited for customers to put more money on their cards in the run-up to Christmas and now cashing in by telling them they are going to have to pay more than they thought on those purchases.
“They have declared war on their own customers and people should vote with their feet.”
However, for those without a perfect credit rating, walking away from Barclaycard may prove difficult as other lenders may not offer them a card in the current lending squeeze.
Barclaycard has attempted to justify the dramatic rise in the letter to customers. It states: “We may change our interest rates if there is a change in our costs, including those relating to funding.”
Barclaycard is meanwhile tempting new cardholders with the longest zero per cent balance transfer offer currently available in the UK. New applicants for a Barclaycard Platinum do not have to pay any interest on balance transfers until August 2012.
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