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Barclays bucks the trend: Bank comes under fire as they are accused of not giving bad credit consumers enough help

The UK bank Barclays has come under fire for not doing enough to help consumers that are in really bad credit.

In a move which has been attacked by finance experts, some consumers will see the minimum repayment rate on outstanding debts fall by .75% effective from this month.

It has been seen as a blind stab at an attempt to gain more profits. Lower minimum repayments result in a longer period to pay off debt, hence increasing the amount of interest paid and boosting profit made on consumer debt.

Barclays said they took the move to help consumers who are constantly being rejected for credit cards for bad credit with 0% rates of balance transfer. It has emerged from new research that such deals have almost materialised off the market for consumers with bad credit, although a lot of consumers are still trying.

Even though minimum repayments have been seen by some as a way to relieve the strain of debt, self-styled ‘money saving expert’ Martin Lewis explained how minimum repayments do nothing for the consumer.

The MoneySavingExpert.com guru said this: "Minimum repayments are sheer genius for credit cards companies as they get to look generous by 'cutting costs' when they're actually keeping customers perpetually in debt.

"As the amount you owe reduces, so does the amount you repay, meaning most people are barely covering the interest that accrues, and hardly eating into the amount owed at all."

Really, this means that the advice to consumers is to pay off as much as you humanly can per month to make a better dent in your outstanding debt on a month-to-month basis, as paying off debts by just chipping in the minimum repayment could take up to a century according to calculations.

Barclaycard put up their defences and said this in a statement: "We are doing this to help customers. This is an option we are giving to selected customers for them to be able to make a reduced minimum repayment for a limited period if the customer chooses to do so. We understand that some customers may appreciate this additional flexibility during the current economic circumstances."

They also urged their critics to remember that only a small cross section of their wide consumer base had been offered this opportunity. Consumers chosen have been understood to have been contacted by letter detailing their opportunity and the implications it brings.

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