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Defaults on credit card repayments 'have fallen'

The number of customers defaulting on credit card repayments and loans fell in the last three months of 2009, contrary to predictions made by lenders, the Bank of England has announced.

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21 January 2010

Defaults on credit card repayments 'have fallen'”

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Lenders overestimated the number of people defaulting on unsecured credit, but the amount lost through defaults rose in the same period, the Bank's Trends in Lending report said.

As a result, the cost of interest on credit card borrowing has increased.

Default numbers are lower than expected due to a fall in unemployment in the three months to November, resulting in more customers looking to pay off their unsecured credit bills.

The Bank was told by lenders that this trend is expected to continue.

Individuals looking to limit the size of their credit card debts can also look to swap credit card provider, taking advantage of any 0% balance transfer offers.

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Credit Cards	0% Balance Transfers	0% Purchases	APR Representative (Variable)
	Tesco ClubCard Credit Card
	9 months	15 months	16.9^%
16.9% APR representative (variable). Based on a credit limit of 1200 and purchase rate 16.9% p.a(variable).
	Virgin Credit Card
	20 months	3 months	16.8^%
16.8% APR representative (variable). Based on a credit limit of 1200 and purchase rate 16.8% p.a(variable).
	Barclaycard Platinum with BT
	22 months	3 months	17.5^%
17.5% APR representative (variable). Based on a credit limit of 1200 and purchase rate 17.5% p.a(variable).
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