Barclaycard: Interest rate freeze now over
Barclaycard is lifting a freeze on its interest rates - which will see some customers deemed a higher risk being charged more.
However, the credit card company is denying reports it is set to introduce widespread interest rate hikes.
Reports today claimed the credit card company was set to introduce risk-based pricing - which is used across the industry so those most likely to default face higher interest rates.
However, Barclaycard has hit out stating it was only lifting a rate freeze put in place in January, and no immediate rate increase was planned and risk-based pricing had always been used.
"We're not announcing price increases, however as is standard across the industry we set prices according to the risk of lending," a Barclaycard spokesperson said.
"The vast majority of Barclaycard customers will see their rate remain the same or reduce in 2009 and as stated only a tiny fraction of customers would see their rate increase if their risk increased."
He added any increases in rates would meet commitments made to the government at the credit card summit in November last year.
At the firms then agreed a deal over informing borrowers over rate charges and changes to credit limits. Companies also agreed to suspend debt collection for 30 days if a customer is in serious discussion with a debt advice agency on a draft debt repayment plan.
Barclaycard also announced a new scheme to target customers by telephone or text message that may be struggling.
A pilot has helped 11,500 people - identifying those whose card usage has changed, from just paying off minimum amounts each month from previously clearing balances each month or a sudden increase in cash withdrawals.
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