-
Money
- Credit Cards
- Bank Accounts
- Saving & Investing
-
Mortgages
- Popular Mortgages
- Fixed Rate Mortgages
- Tracker Mortgages
- Remortgages
- First Time Buyer Mortgages
- Offset Mortgages
- 85% Loan-to-Value Mortgages
- 90% Loan-to-Value Mortgages
- 95% Loan-to-Value Mortgages
- 100% Loan-to-Value Mortgages
- No Fee Mortgages
- Islamic Mortgages
- Buy to Let Mortgages
- Commercial Mortgages
- Loans
Money Saving E-Newsletter
Enter e-mail address to signup NOW!
Home 
Credit Cards News Bad Credit Card debts 'to dramatically increase'
Credit Cards News Bad Credit Card debts 'to dramatically increase' Bad Credit Card debts 'to dramatically increase'
Date of Publication: Monday, 09 November 2009 12:10
An accountancy firm has suggested that by the end of 2010, bad credit card debts could account for as much as 9% of all outstanding balances.
According to PricewaterhouseCoopers (PwC), "Bad debts in the sector have reached historic highs," with figures currently standing at around 6%.This comes despite the credit card industry seeing a "cooling passion", with borrowing down 3% to £64bn over the past year, and a cut in the number of credit cards in circulation, falling 8%, PwC reported.
PwC said in its latest edition of the annual report Precious Plastic that the past year has seen a peak in the number of consumers willing to take on more unsecured debt, with around £230bn made up by lending products such as credit cards, bank loans and hire purchase agreements – part of the total consumer debt which includes mortgages standing at around £1.5 trillion.
PwC highlighted that the latest declining trend showed not only a change in consumer choice, but also in credit card company behaviours, with tighter lending criteria restricting new lending to customers with a good credit history.
"The recent announcement by one major issuer that they would not generally seek to acquire new credit card customers without those same customers also holding a current account with them is in stark contrast to the time when credit card issuers accounted for one in every four pieces of junk mail that made it through our letterboxes," PwC said.
Credit Card companies wrote off close to £3.2bn due to bad debts last year.
PwC has predicted that these levels will rise significantly to new highs in the UK after the recession has continued to cause rising unemployment, short-time working, pay freezes and pay cuts.
The forecast showed that as bad debts increased, borrowing rates on credit cards would also rise, as well as monthly or annual fees becoming a standard feature after lenders look to increase revenue.
"At the higher end of the market customers will pay for access to premium benefits and at the lower end more marginal customers will be expected to pay for even a standard credit card," the firm said.
Paul Rodford of Card Payments, the UK cards association, said credit cards are likely to become far less easily available.
"Consumers are going to be faced with the unhappy prospect of a marked reduction in the availability of credit, a reduction in choice of products and an overall increase in charges with both increased interest rates and an expansion of annual and other fees," he said.
Written by Sam Gooch
Monday, 09 November 2009 12:10
Top 5 Credit Cards
|
Card |
Balance Transfers |
Purchases |
Typical APR (variable) |
Apply |
|---|---|---|---|---|
| View Full Table > | ||||
 |
||||
|
N/A
|
N/A
|
18.9%
|
||
| Representative Example: If you spend £1,200 at a purchase interest rate of 18.9% (variable) your Representative APR will be 18.9% (variable). | ||||
 |
||||
|
N/A
|
N/A
|
11.1%
|
||
| Representative Example: Representative 11.1% APR (variable) based on an assumed Credit Limit of £1,200. Standard interest rate for purchases: 6.9% p.a.(variable) Annual fee: £24. Your actual credit limit will depend on our credit assessment of you. | ||||
 |
||||
|
N/A
|
N/A
|
11.1%
|
||
| Representative Example: Representative 11.1% APR (variable) based on an assumed CreditLimit of £1,200. Standard interest rate for purchases: 6.9% p.a.(variable) Annual fee: £24. Your actual credit limit will depend on our credit assessment of you. | ||||
 |
||||
|
0%
12 mths
|
0%
12 mths
|
15.9%
|
||
| Representative Example: If you spend £1,200 at a purchase interest rate of 15.9% (variable) your Representative APR will be 15.9% (variable). | ||||
 |
||||
|
0%
12 mths
|
0%
26 mths
|
18.9%
|
||
| Representative Example: If you spend £1,200 at a purchase interest rate of 18.9% (variable) your Representative APR will be 18.9% (variable). | ||||
Advice
No foreign transaction fees on purchases and cash withdrawals abroad when made in the local currency. No cash withdrawal fees at home and abroad (interest is charged immediately on cash withdrawals and some independent ATM providers may charge a withdrawal fee).
| Introductory Offer | |
|---|---|
| Balance Transfer Rate: | N/A |
| Balance Transfer Fee: | N/A |
| Purchase Rate: | N/A |
| Representative APR | |
| Purchases: | 18.9% p.a. (variable) |
| Representative Example: | If you spend £1,200 at a purchase interest rate of 18.9% (variable) your Representative APR will be 18.9% (variable). |
| Annual Rates | |
| Balance Transfers: | 18.9% p.a. (variable) |
| Cash Advance: | 18.9% p.a. (variable) |
| Annual Fee: | N/A |
| Standard Features | |
| Interest Free Days: | Up to 56 days |
| On-Line Banking: | Yes |
| Approval Criteria | |
|
|
| Introductory Offer | |
|---|---|
| Balance Transfer Rate: | N/A |
| Balance Transfer Fee: | N/A |
| Purchase Rate: | N/A |
| Representative APR | |
| Purchases: | 11.1% p.a. (variable) |
| Representative Example: | Representative 11.1% APR (variable) based on an assumed Credit Limit of £1,200. Standard interest rate for purchases: 6.9% p.a.(variable) Annual fee: £24. Your actual credit limit will depend on our credit assessment of you. |
| Annual Rates | |
| Balance Transfers: | 6.90% p.a. (variable) |
| Cash Advance: | 24.9% p.a. (variable) |
| Annual Fee: | £24 |
| Standard Features | |
| Credit Limit: | £25,000 |
| Interest Free Days: | Up to 56 days |
| On-Line Banking: | Yes |
| Approval Criteria | |
|
|
| Introductory Offer | |
|---|---|
| Balance Transfer Rate: | N/A |
| Balance Transfer Fee: | N/A |
| Purchase Rate: | N/A |
| Representative APR | |
| Purchases: | 11.1% p.a. (variable) |
| Representative Example: | Representative 11.1% APR (variable) based on an assumed CreditLimit of £1,200. Standard interest rate for purchases: 6.9% p.a.(variable) Annual fee: £24. Your actual credit limit will depend on our credit assessment of you. |
| Annual Rates | |
| Balance Transfers: | 6.90% p.a. (variable) |
| Cash Advance: | 12.9% p.a. (variable) |
| Annual Fee: | £24 |
| Standard Features | |
| Credit Limit: | £25,000 |
| Interest Free Days: | Up to 56 days |
| On-Line Banking: | Yes |
| Approval Criteria | |
|
|
Advice
Collect 0.5% unlimited cashback on all purchases in pounds sterling. Also, get commission free card purchases abroad!! No balance transfer fee applies for the first 3 months of account opening, after which time it will revert to 2.4% (Minimum £5)
| Introductory Offer | |
|---|---|
| Balance Transfer Rate: | 0% for 12 mths |
| Balance Transfer Fee: | N/A |
| Purchase Rate: | 0% for 12 mths |
| Representative APR | |
| Purchases: | 15.9% p.a. (variable) |
| Representative Example: | If you spend £1,200 at a purchase interest rate of 15.9% (variable) your Representative APR will be 15.9% (variable). |
| Annual Rates | |
| Balance Transfers: | 15.9% p.a. (variable) |
| Cash Advance: | 27.9% p.a. (variable) |
| Annual Fee: | N/A |
| Standard Features | |
| Credit Limit: | £25,000 |
| Interest Free Days: | Up to 56 days |
| On-Line Banking: | Yes |
| Cashback | |
| Standard Cashback Rate: | 0.50% |
| Approval Criteria | |
|
|
Advice
Introductory Balance Transfer Fee of 3% is subject to a minimum charge of £3. Online account management is only available for existing Clydesdale Bank customers.
| Introductory Offer | |
|---|---|
| Balance Transfer Rate: | 0% for 12 mths |
| Balance Transfer Fee: | 3% (min £3) |
| Purchase Rate: | 0% for 26 mths |
| Representative APR | |
| Purchases: | 18.9% p.a. (variable) |
| Representative Example: | If you spend £1,200 at a purchase interest rate of 18.9% (variable) your Representative APR will be 18.9% (variable). |
| Annual Rates | |
| Balance Transfers: | 11.9% p.a. (variable) |
| Balance Transfer Fee: | 3% (min £3) |
| Cash Advance: | 27.9% p.a. (variable) |
| Annual Fee: | N/A |
| Standard Features | |
| Credit Limit: | Subject to Status |
| Interest Free Days: | Up to 59 days |
| On-Line Banking: | Yes |
| Approval Criteria | |
|
|
Advice
Online account management is only available for existing Clydesdale Bank customers.
| Introductory Offer | |
|---|---|
| Balance Transfer Rate: | 0% for 12 mths |
| Balance Transfer Fee: | 3% (min £3) |
| Purchase Rate: | 0% for 26 mths |
| Representative APR | |
| Purchases: | 18.9% p.a. (variable) |
| Representative Example: | If you spend £1,200 at a purchase interest rate of 18.9% (variable) your Representative APR will be 18.9% (variable). |
| Annual Rates | |
| Balance Transfers: | 11.9% p.a. (variable) |
| Balance Transfer Fee: | 3% (min £3) |
| Cash Advance: | 27.9% p.a. (variable) |
| Annual Fee: | N/A |
| Standard Features | |
| Credit Limit: | Subject to Status |
| Interest Free Days: | Up to 59 days |
| On-Line Banking: | Yes |
| Approval Criteria | |
|
|
