en-us http://backend.userland.com/rss Your Friends @ Myvesta.org.uk (stever@myvesta.org) myvestaukblog_archive.html stever@myvesta.org 114906829804268539 Customers of Barclaycard, the nations largest credit card supplier, are steadily defaulting on £1.00 out of every £5.00 they have borrowed, fuelling fears over the extent of indebtedness across the country.

The blow-out in bad debts at Barclaycard, which has 11.2 million UK cardholders, was revealed in a financial statement yesterday from the parent bank, Barclays. It said that first-quarter growth in bad debts at Barclaycard continued to soar at the same pace as last year, when they grew by 44 per cent to £1.1 billion.

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Extrapolating to all of 2006 produces a possible bad debt charge at Barclaycard of £1.6 billion — almost one fifth of the £8.6 billion lent to all Barclaycard’s extended credit customers. These customers are the minority who fail to pay back their balances in full each month.

Including the majority who pay back in full, Barclaycard has £24 billion outstanding.

Naguib Kheraj, Barclays finance director, said that while the number of people in difficulty was stable, the average balances of defaulters was rising and the recovery rate — the amount of debt got back by the bank — was falling.

He also suggested that welching was becoming less of a taboo. “Clearly, it’s more acceptable for people socially to default on their debts.”

Personal bankruptcies are soaring, partly because of a change to the rules that allows people to walk away from their liabilities after just 12 months.

The Times
http://www.myvesta.org.uk

Barclays otherwise reported strong trading in the quarter.