Major bank changes from Barclays and Santander for mortgages and credit cards

Mainstream banks on the high street, such as Barclays, Lloyds, and Santander, have announced significant changes that could potentially affect millions of their customers.

These policy updates will likely influence individuals that hold current account and credit card holders. Mortgage customers in particular may also be affected by these changes. It is highly recommended to review these updates to ascertain if they’ll impact you. If you find any alterations disagreeable, it might be an opportune time to consider switching banks and exploring the various switching offers currently available.

A few of the most significant changes in retail banking will affect customers at Barclays, where reductions to minimum repayments might cause your debt to spike, or at Natwest, where premium account holders are expected to encounter higher fees solely for keeping their bank account active, according to recent reports.

At the moment, shifting banks could earn you up to £175, though it’s vital to read the terms and conditions first to ensure your eligibility.

Barclays

Barclaycard is reducing minimum repayments for its credit card customers, which means your monthly payments will likely decrease, but this could result in an extended debt period and potentially much higher interest payments. Currently, the repaid amount is the highest of 3.75% of your balance, 2.5% of your balance plus interest, or £5.

This change is applicable to most Barclaycards, including Avios, Platinum, and Rewards cards. However, this will reduce from July 22 to the highest of 1% of your balance, 1% of your balance plus interest, or £5. If you have a 0% interest card – the most affordable method for repaying credit card debt – you will not be impacted.

Lloyds

The Lloyds Banking Group – which includes Lloyds, Halifax, and Bank of Scotland – is adjusting the interest rate fees on overdraft charges. Most customers are currently charged two standard rates of 39.9% and 49.9% when they slip into their overdraft.

There is a cheaper overdraft fee of 27.5% available for certain individuals who pay a monthly fee of £3 for a Club Lloyds Bank account. However, the banking group is adding two novel overdraft rates of 19.9% and 29.9% in August. This implies that some individuals will now be paying less for their overdraft while others will have to pay more.

Your charged rate tier depends on your credit history and how your account is utilised. The usual rate will be 39.9%. There will also be two temporary rates of 34.9% and 44.9% for six months before these are increased to 39.9% and 49.9%. As of July 1, Lloyds Bank customers with a silver and platinum account will be allowed to use their cards abroad without any international charges.

Nationwide

Nationwide has commenced distribution of its latest Fairer Share bonus payment of £100 to close to 3.9 million customers. To be eligible for this payment, you would need to have a qualifying current account, as well as, a mortgage or savings account with Nationwide. Specific qualifying criteria is available for you to review.

The bonus should be received by you by June 28. Nationwide has also confirmed a member-only switching incentive of £200, and a new Member Exclusive Bond for all current members, which offers a rate of 5.5% AER/gross (fixed) for 18 months.

NatWest

NatWest has announced an increase in the monthly fee for some of its packaged bank accounts. The monthly fee for its Reward Black account will be increased from £31 to £36, effective from June 28. Similarly, the monthly fee for the Reward Platinum account will be raised from £20 to £22.

The monthly fee for the NatWest Reward Silver account will remain unchanged at £10 per month, while the £2 monthly fee for the NatWest Reward account will also remain unaffected. Regrettably, the available timeframe for mortgage borrowers to lock in a new rate before their current deal expires, has also been shortened from six months to four months.

Santander

Like NatWest, Santander is also reducing the period for securing a new mortgage deal from six months before your current mortgage ends, down to four months. As per MoneySavingExpert.com by Martin Lewis, this change will afford borrowers less time to find superior rates before current deals conclude.

Several other mainstream lenders, including Barclays, Halifax, HSBC, Lloyds and NatWest, will still permit you to secure a new mortgage deal six months in advance.

First Direct

Beginning August 10, First Direct will cease sending text messages with balance information. Currently, customers occasionally receive text notifications about their current account balance or “mini statements” with the remaining balance and the five latest transactions.

As a result, First Direct users will have to use its app or online service to check their balance. Note that the bank will still dispatch text messages if you go into overdraft, or if your mortgage rate changes owing to fluctuations in the Bank of England’s base rate.

Metro Bank

Metro Bank will alter the rates on some of their variable saving accounts from July 8. This will affect the holders of limited edition instant access accounts or instant cash ISAs opened between November 10, 2023, and February 12, 2024. These accounts currently pay 5.22%, 4.97%, 4.51%, or 4.01%. However, these rates will be cut to 3.95% starting July 8.