Wednesday, November 29, 2006
Debt starts to bite the lenders
Barclaycard, Britain’s most popular credit card, signalled yesterday that it expected its army of customers to default on an unprecedented £1.5 billion of debt this year. Its parent company, Barclays, blamed rising numbers of personal insolvencies, particularly individual voluntary arrangements (IVAs), for the blow-out in bad debts. In the second half of this year, the bank has been writing off debts owed by credit card and personal loan customers at the rate of £31 million a week. The problem has been worsening, the write-off rate rising from £19.5 million a week to £22.7 million and then £26.8 million in the previous three six-month periods.