Credit problems common this Christmas

Posted 2007-11-26

Potentially thousands of credit applications may be rejected by banks during the holiday season.

According to accountants PricewaterhouseCoopers (PwC), repayments are becoming a problem for an increasing number of consumers, leading to profit slumps for many credit card providers. Also contributing to the slump is a rise in competition in the sector. The firm’s Precious Plastics 2008 report claims that £4 billion has already been lost by credit companies as a result.

The figures provided by PwC represent just a small part of the problem. The UK continues to experience worrying debt trends, with the average British adult owing £33,000 in unsecured loans – twice what it was in 2000.

Richard Thompson of PwC warms that the situation is not likely to improve any time soon. “Banks are continuing to take action in response to the rise in consumer debt by tightening their credit acceptance policies. Many consumers will find it increasingly difficult to obtain credit in the run-up to Christmas.”

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