Some Barclaycard customers have found their interest rates cut as the company is pressured to help people struggling with their finances as much as possible.

Approximately three million customers will see a massive 2.5% to 5% drop in their interest rates.

However, some critics are saying this is too little too late, and that credit card firms are reacting too slowly to the Bank of England’s Bank Rate fall, which is currently at 1.5%.

Currently, thirty one million people own credit cards, and half of these are paying their credit card bills at the end of every month. These bills have an average interest rate that is over ten times higher than the Bank Rate.

Changes to come?

Barclays is the first to make a move like this since all major credit card providers in the UK agreed to set new “fair principle” rules with the government in December.

Other changes that Barclays intends to make include the introduction of a helpline which will offer financial support, lower rates for new customers and four month freeze on rates for existing customers.

They have also decided they will avoid contacting late payers for two months, on the understanding that the customers are actively working to sort out their financial problems.

Who will benefit from the cut?

However, according to Anthony Jenkins, chief executive of Barclaycard, when it comes to the interest rate cut, although three million will benefit from the interest rate cut, a further nine million will not see any change as their risk of defaulting had increased.

He said: “It’s a difficult time for many customers and for some their risk has gone up.”

He also added that, while the Bank Rate has fallen sharply, people need to remember borrowing money to lend to customers is “just one element” of its business.

It’s not just Barclaycard that’s changing

After they were threatened by the Office for Fair Trading last month, many credit card firms are looking at a new code of conduct, all of which seem to include giving customers struggling with repayments some time to find the funds.

Companies will also have to give customers 30 days notice when they intend to increase their interest rates, and will not be able to increase rates for the first year after a customer signs up for a credit card. After the one year period, companies will be allowed to increase interest rates a maximum of every six months.

However, they are also going to cover those who are in financial difficulty and struggling to pay the minimum repayment amount or who are receiving help from a debt advice service.

What’s Your View?

Are credit card companies doing enough to help customers, or is it too little too late? Will the new plans make a difference, or are they just a waste of time? Have your say here.