Barclaycard freezes rates for all UK customers

Barclaycard is freezing the prices for all its UK personal customers for at least the next 4 months. Although committed to the principle of risk-based pricing the business has decided to suspend the process to help its customers. This means that no individual will have their purchase interest rate increased, until at least June, because their risk profile changes.

Barclaycard will reduce the purchase interest rate for at least three million of its UK customers by between 2.5% and 5.0%. Selected customers will be informed directly of the change, with half of these reductions being implemented in February and the remaining taking place throughout the year. These customers have been identified as having a low risk profile and they include both those who clear their account regularly and customers who borrow.

For new customers:

Barclaycard has reduced the headline APR for its flagship Barclaycard Platinum product (the most popular card in its portfolio) and Barclaycard OnePulse (the combined credit, contactless and Oyster card), by 2.5% to 12.4%, for new customers. This new rate is available through its website, barclaycard.co.uk. In addition, Barclaycard will continue to offer a full range of cards to new customers, depending upon their individual circumstances and needs.

For customers facing financial hardship:

Barclaycard has established a new helpline for customers who are concerned about their financial situation. Those who believe that they may get into difficulty can talk direct to an expert and receive practical support and advice by calling the helpline number available on barclaycard.co.uk.

Barclaycard is using behavioural data shared with other credit card lenders and additional information about the total borrowings of customers to allow the company to predict, even more accurately, when they may be getting into difficulty. Barclaycard is launching a programme of contacting customers who are showing potential signs of financial difficulty, before they miss payments, to offer support and advice to individuals as soon as possible.

Barclaycard will take timely action to seek to prevent any of its customers from getting into even more difficulty when they show signs of financial stress. The business believes that it isn't in the long term interest of customers to borrow more money when they get into difficulty, and will continue to react to signs of difficulty by reducing their credit limit and offering advice.

Barclaycard has increased its activity in the area of debt advice. In addition to refresher training for its own people, improved information on statements and on barclaycard.co.uk, the company continues to support the free money advice sector including Citizens Advice, Money Advice Trust and Consumer Credit Counselling Service. Barclaycard asks customers to contact it as soon as they are experiencing financial problems and suggests that they contact free money advice agencies if they have debts with more than one lender.

Barclaycard has committed not to contact customers for up to two months, to seek payment, if they are actively working with the free money advice sector to sort out their financial difficulties. Continuous training of collections advisors is being undertaken to ensure that all customers in difficulty are treated with compassion, empathy and respect. Barclaycard will work with each individual customer to find the best way of helping them which may include reducing interest and fees as well as long term repayment plans.

Barclaycard has committed an additional £4.3m, over the next three years, to the company's flagship community initiative Horizons which it launched in 2005. Working with three charity partners, including Citizens Advice, the additional money will enable Horizons to support 450,000 lone parents and their children to deal with financial hardship and build their skills for a brighter future through a programme of debt advice, financial literacy training, grants and an employability programme.

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."