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The UK's biggest credit card provider is to freeze interest rates for at least four months and launch a new helpline in a bid to help struggling borrowers, it announced today.
Barclaycard said at least 3 million of its 12 million customers would have the rate they paid on purchases cut by between 2.5% and 5%, while all other customers would have their rates frozen.
The card provider said it remained committed to risk-based pricing, but until at least June it would not increase the interest rates on purchases for any customers, even if their risk-profile changed for the worst.
Other measures designed to help struggling borrowers include the introduction of a helpline offering expert advice, debt advice refresher courses for staff, and a pledge to "take timely action" to help people showing signs of financial stress before they miss making a payment.
It said: "The business believes that it isn't in the long-term interest of customers to borrow more money when they get into difficulty, and will continue to react to signs of difficulty by reducing their credit limit and offering advice."
The announcement follows a summit late last year between card providers and the government in which lenders agreed to do more to help customers who had fallen behind on payments.
However, since then some other card companies have raised rates, including Capital One which last week angered customers by increasing the cost of borrowing by up to 14% in some cases.
Barclaycard's chief executive, Antony Jenkins, said: "We recognise that 2009 is going to be a difficult year for many people and we want to do what we can, when we can, to help Barclaycard's customers.
"Today's announcement will assist millions of our customers and we are determined to support them further, in innovative ways, over the coming months."
Figures from financial information website moneyfacts.co.uk show Barclaycard's purchase rates are below average, with the firm typically charging 14.9% on new spending compared with an industry average of 17.7%.
However, although the company said it was suspending risk-based pricing for four months, low-risk customers will benefit most from today's announcement of rate cuts. Half of those cuts will come into force this month with the rest introduced later in the year.
New customers taking out a Platinum card or the Barclaycard Oneplus will see the headline interest rate cut by 2.5% to 12.4%.
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