Barclaycard write-off £1.5bn loans
''Its easy to spend money with a credit card. The problem lies in paying the money back. High interest rates sometimes as much as 30% make repayments for many a great difficulty. Unless you can afford to repay the full amount spent each month, you should not use credit cards. There are many cheaper loans available from Internet and high street banks.'' firstname.lastname@example.org
BAD debts amassed by Barclaycard customers have risen by over a third this year with the credit card company likely to write off an unprecedented £1.5 billion in unpaid loans.
The Northampton-based company, which has 11.2 million cardholders, expects this year's write-off to equate to £140 per customer.
According to a Barclays trading statement released this week, cardholder debt – which was up 37 per cent in the first half of 2006 – had not improved in the second half.
Although the sharp rise in bad debt had badly hit profits at the credit card division, its parent company, Barclays, this week met the City's estimate of a 32 per cent hike in profits to just under £7 billion.