Credit Card debt sees highest growth since the Recession

Posted by Ben Tumilty in Dealing with Debt on 2 November 2016 - Ben is a Credit Analyst at checkmyfile

Household credit card debt increased by more than £500m in October, pushing the amount owed on credit cards to £66bn – roughly £2,400 per household in the country.

The Bank of England’s figures show that credit card debt has rocketed by 8.4% over the last 12 months – not since November 2008, in the middle of the recession, have we witnessed a greater annual increase in credit card debt.

The release by the BoE has divided opinion. Some economic experts are pleased to see this, as it suggests consumer confidence may be on the increase, and that people are looking to cash in on introductory offers, lowering interest rates and are generally happier to be spending money.

On the other hand, consumer campaigners and debt charities will not welcome this news. The major concern from this area is that people are borrowing more than they can afford to pay back, as people are tempted by the zero percent introductory offers but fall foul of this by not clearing the balances before this period runs out, or being on the receiving end of charges and fees.

Commenting on the findings, Stepchange’s Peter Tutton explains, “Credit cards are already the most common type of debt we see and we are concerned that increased lending could see even more people fall into problem debt.”

Tutton expresses concerns that we may end up in the same boat as we were before the recession, where too many households had uncontrollable credit card balances, and that the increase in borrowing may spiral into genuine debt problems.

Stuart Carmichael from the Debt Support Trust suggests that some of these consumers in financial difficulties should not be provided with credit in the first instance, and says it is “frightening” how quickly that UK credit card debt has grown.

Some lenders are starting to pick up on this – in a separate release, Virgin has confirmed that it is looking to tighten its internal requirements for credit card application, as its release shows that their credit card holders had racked up £2.2bn of debt just in the first 9 months of the year. This figure is startlingly high, even more so when compared to the £1.6bn accrued in the entirety of 2015.

If you are concerned about your financial situation it is advisable to seek some impartial financial advice, for example through Citizen’s Advice, Stepchange or numerous other debt charities.

Check Your Multi-Agency Credit Report

30 Day Free Trial

Does Statute Barred Mean My Debt is Written Off?

If you look around on the internet for debt advice you might see one questionable tip popping up from time to time: ‘don’t pay off your debts, wait six years for it to become statute barred and you’ll be home scot-free.’ If this sounds too good to be true, that’s because it probably is, and if you think it’ll be without consequence you could be in for a nasty surprise.

Published on 10 Jan 2018 by Tom Magor

Full Article

How Your Credit Score is Affected When a Default Drops Off

If you’ve got one default, you might be counting down the days until it is no longer reported to the Credit Reference Agencies. But if you have more than one, will you see your Credit Score rise as each one drops off of your Credit Report?

Published on 4 Jan 2018 by Richard Catlin

Full Article

What could happen after a county court judgment is issued

Once a court judgment has been issued but the individual still refuses to pay the outstanding debt or come up with an agreement to clear it, the claimant has a number of legal remedies available to them through the court systems.

Published on 16 Jan 2017 by George Coburn

Full Article

Facing Financial Problems

No one should feel like money problems are unique to themselves, we all have to think about money at some point. Financial problems, job security, debt and redundancy are all issues that realistically should be considered. How we react to these factors can impact our lives and our wellbeing, but luckily there are many different facilities that aim to help those trying to cope with money worries.

Published on 12 Jan 2017 by Paul Anderson Riley

Full Article

Consolidating Debt

Do you have what seems a never-ending mountain of debt and you’re struggling to know what you’re paying and to who? If so, you may be considering debt consolidation, in particular a debt consolidation loan.

Published on 9 Jan 2017 by Ben Ryland

Full Article

Don't give yourself a Christmas hangover

If you are concerned about debt during the festive season you should get advice now, warns the National Debtline. 5m Brits worry about money in the run up to Christmas, with one in three adults putting their gifts on credit, and if you are one of them, more debt is the last thing you want for Christmas.

Published on 6 Dec 2016 by Kelly Luff

Full Article

Students understanding of debt is seriously lacking

Christmas is an expensive time of year. Though for many students, this is just as relevant for most other times of the year too.

Published on 29 Nov 2016 by Ben Ryland

Full Article

Insolvency and its effect on your credit score

Contrary to the belief of some, insolvency is not a ‘get out of jail free card’. When you are declared insolvent, the entry remains reported for 6 years on your credit file and will continue to pose a significant barrier to your chances of obtaining credit – even after the insolvency is discharged.

Published on 17 Nov 2016 by Tom Blandford

Full Article

Number of people going insolvent in England and Wales increases by almost a fifth

Personal insolvencies saw a 20% increase in the third quarter of this year compared to the same three months in 2015, based on data released from the Insolvency Service.

Published on 3 Nov 2016 by Ben Tumilty

Full Article

Debt worries worse than ever

Debt charity StepChange has released figures showing that the number of consumers contacting them about debt problems has hit a record high in the first half of the year. Over 300,000 sought advice from the charity between January and June of this year – StepChange says it has never had such high numbers.

Published on 28 Oct 2016 by Ben Tumilty

Full Article


We have loads of great customer reviews