Flexi-Rate card encourages larger payments

In the seven months since Flexi-Rate was launched, half as many holders of the new credit card simply make minimum payments, while there has been a ten per cent rise in those paying above the minimum each month.

This means customers spend less money on interest and less time settling their balance, as the Flexi-Rate card offers a lower interest rate to those who pay back a higher proportion of their balance.

James Le Brocq, head of Barclaycard UK credit cards, said: “Flexi-Rate is doing exactly what it was designed to do – that is, encouraging people to pay back borrowing sensibly.

“Increasing the amount you pay back each month can dramatically reduce both interest costs and the time it takes to repay.”