Compare Credit Cards with CardSmart

'Bad' credit card debts double to £1.6bn

Banks are having to write off record levels of 'bad debts' on their credit cards, Bank of England figures have revealed.

More from Spending Money
19 January 2010

'Bad' credit card debts double to £1.6bn

Banks are having to write off record levels of 'bad debts' on their credit cards, Bank of England figures have revealed.

The figures show the total value of write-offs doubled to £1.6 billion in the third quarter of 2009; a steep rise from the £800 million in the two previous quarters.

In all, bad debts totalled £3.2 billion, reflecting the financial downturn and the realisation that money would not be repaid by defaulting borrowers.

But banks responded by reducing their borrowing limits and becoming more cautious about who to offer loans and mortgages.

David Black of financial consultancy Defaqto said: "HSBC, NatWest and RBS will only offer new credit cards or unsecured loans to their current account customers."

"Banks also want to sweep bad news into one year's accounts to make future years look better," he added.

Credit card interest rates may rise as lenders and banks look to recover their losses. The Bank of England's figures show that as of last November, the average credit card interest rate was 15.89 per cent.

Written by Alex Adams

Written by ©

Best Buy Credit Cards

Credit Cards Balance Transfers Purchases APR Representative (Variable)
Tesco ClubCard Purchases Credit Card Logo Tesco Bank Logo Tesco ClubCard Purchases Credit Card Apply
 0%
9 months
2.9% fee
 0%
18 months
 
16.9%
Representative Example: The annual purchase rate is 16.9% p.a (variable) so if you spend £1200 your representative apr will be 16.9% p.a (variable)
Barclaycard Platinum With BT (27 Mths) Logo Barclaycard Logo Barclaycard Platinum With BT (27 Mths) Apply
 0%
28 months
3.5% fee
 0%
6 months
 
18.9%
Representative Example: The annual purchase rate is 18.9% p.a (variable) so if you spend £1200 your representative apr will be 18.9% p.a (variable)
Compare More Credit Cards...

Categories

Credit Card News Archive

Some important information about this page

The content and information on this website are intended as general information only and shall not be construed as financial advice or recommendations of any nature in accordance with the Financial Services and Markets Act 2000 nor is it intended to address specific financial requirements. We strongly recommend that you seek independent financial advice before using and/or relying on the information made available to you or prior to purchasing any financial product/service listed on the Website. Whilst every attempt has been made to ensure that the content and information published are true, correct and up to date, no warranty, guarantee or representation is given as to its accuracy, reliability or fitness for a specific purpose.

The Best Buy credit card comparison tables feature financial products/services of our advertisers and may not necessarily constitute the best offers in the market for each of such products/services.

Copyright © CardSmart Ltd 2009 - 2013. All Rights Reserved | Privacy Policy | Terms

"CardSmart" and the CardSmart logo are registered trademarks of Smart Online Marketing Ltd. Company registration no: 08430745