Fastest growth since before the crash.
In April outstanding credit card debt in the UK was £68bn. This is 9.7% up on the previous year and means the fastest growth since 2006.
The Financial Conduct Authority (FCA) estimates 3.3m people have “persistent” credit card debt. In an 18 month period they pay more in interest and charges than in actual repayments.
At Citizens Advice Reigate & Banstead our advisers helped people with over 500 debt problems in the year to April. Nearly a fifth involved credit cards. Currently we’re advising on overall debt totalling more than £1m.
What can be done?
Competition between lenders is thought to be part of the problem. Long ‘zero-rate’ periods for customers who transfer balances could be encouraging people to over-spend – so much so that the Bank of England has warned about irresponsible lending. The FCA is also worried and wants lenders to help those who are really struggling by reducing or cancelling interest or charges.