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November 11, 2009

Moneysupermarket raises credit card debt alert

by Gill Montia

Story link: Moneysupermarket raises credit card debt alert

Moneysupermarket.com is alerting Britons to the dangers of credit card debt, following a recent report from accountancy firm PricewaterhouseCoopers (PwC), predicting that rates are sure to rise.

Research by the price comparison website indicates that almost one third of credit card users do not foresee paying off their balances in the next six months, with borrowers aged between 20 and 29 the least likely to make the effort.

Meanwhile, the PwC report has warned that the current business model for UK credit cards is “unsustainable”, with bad debt in the sector at an historic high of almost 6% of outstanding balances.

The firm predicts that the proportion could rise to 9% by the end of 2010 and that rate rises and the introduction of annual fees for borrowers are likely.

Moneysupermarket’s credit card expert, Peter Harrison, describes the PwC report as “very worrying” and urges credit card users to clear Christmas shopping debt as soon as possible.

According to PwC, each UK household has total debt of around £60,000, made up of approximately £50,000 of secured and £10,000 of unsecured borrowing.

 

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