Britain's burgeoning debt crisis was highlighted by Barclaycard yesterday, when it announced that it expected its customers to default on £1.5BN of debt this year.
Seemingly the blame is being placed by Barclays (the parent company) on the rising number of personal insolvencies, eg individual voluntary arrangements (IVAs). A cynic might argue that had the bank been a little more careful with whom it lent money to, then it might not have found itself in this mess.
Barclaycard's write-off rate for bad debt is now a staggering £26.8M a week.
Barclaycard has 11.2M cardholders, and has outstanding at any one time around £25BN.
The write off represents a 37% rise in Barclaycard bad debts, compared with the previous year.
A Citizens Advice spokeswoman said:
"It doesn't surprise us, because all banks are reporting increasing levels of debt. It does, however, mean that lenders should always make sure that people are able to repay the money before they agree to loans. At the same time, people should be wary of borrowing more than they can realistically afford."
Barclays has tightened up its lending criteria in recent months. It now rejects 57% of credit card applicants.
Shutting the stable door maybe?