Credit card balances 'aren't being dealt with'

10/11/2009

Many Britons are showing negligent attitudes to their credit card repayments, with three in ten not planning to clear their balances for another six months at least according to Moneysupermarket.com.

The financial website said that the findings of its new poll were "worrying", with a separate report from PricewaterhouseCoopers suggesting that card fees would soon be hiked by providers.

Moneysupermarket.com also found that younger credit card customers were even less likely than average to pay off their debts over the short term, with 38 per cent of 20 to 29-year-olds saying that they had no intention of making full repayments over the next six months.

PwC, an accountancy firm, yesterday (November 9th) warned that radical changes could affect the credit card sector as a result of the financial crisis and economic downturn, with the products becoming a luxury item as availability from providers declines.

The report also showed that many consumers have themselves changed their money habits over the past year in order to combat their debt problems - with the number of cards in circulation falling by eight per cent during 2009.

Peter Harrison, credit cards expert at Moneysupermarket.com, commented: "Today's news on soaring bad credit card debt, coupled with our research findings, set a very worrying scene."

EuroDebt director Kevin Still said: "EuroDebt hope that the new lending code that came into effect on November 1st 2009 will have an affect on protecting indebted consumers where card issuers try and increase interest rates or impose fees on clients. Clients may also have to deal with reductions in credit limits as these companies try to reduce their risk exposure. Ideally this would require quality communication between the card issuer and the client, however, this often undertaken through a statement mailing."

He added: "Many people starting Debt Management Plans have done so because they can no longer juggle the balances on their cards and lenders have tightened both lending policy and the ability to switch balances."

Tags; Debt Management and Banking, Credit Card Lifestyle, Recent Graduate Debt,

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