Barclaycard freezes or cuts credit costs

ALMOST 12 million Barclaycard customers will have their interest rates cut or frozen until June after the credit card provider pledged to help customers in financial difficulty.

The firm said no customers would have their rates increased for the next four months while some three million low-risk customers would have their rates cut by between 2.4 and five percentage points.

Barclaycard – part of the banking giant Barclays – also said it would set up a new advice helpline and pledged not to chase customers for payments for two months provided they were "actively working" with its advisers.

Credit card providers have come under growing pressure from the government in recent months to introduce fairer terms for struggling households.

Andrew Hagger of Moneynet said: "Since rate cuts on credit cards have been rare over the last few months, and in some cases rates have increased, you could argue that providers now have some room for manoeuvre, considering base rate has fallen by 3.5 per cent in the last four months."

Peter Harrison, credit card expert at moneysupermarket.com, added: "In an environment of falling mortgage and savings rates, card providers had been strangely quiet until now."