It has been claimed that the recession in the UK is being made worse by the rising level of credit card defaults that have been seen recently. According to reports families are being forced into a very difficult financial situation, with tens of thousands of families being affected by the high level of credit card defaults.

Officials from the Organisation for Economic Co-operation and Development claim that British families have the highest debt levels of any major economy, and this is driving many of them to financial ruin.

Between April and June of this year banks are said to have written off around £1 billion in credit card debt, and these figures are expected to be confirmed over the coming weeks in a report from the Bank of England.

The figure is said to be the highest since the last recession in the early 1990s, and is sixteen times higher than in 1997 when the current government came into power. It is also expected to continue rising over the course of this year.

One insolvency specialist stated: ‘More and more people are staring financial ruin in the face. The number defaulting on their credit card debts is growing, and therefore the number of personal insolvencies will grow over the next two years. We have lost the value of thrift in this country, and so people don’t have any savings to fall back on. This is all very well when people are earning, so they can afford to service their debt, but if they lose their job they’ve had it.’

The Tory Party put the blame at the doorstep of Prime Minister, Gordon Brown, stating: ‘The thousands of families being pushed into credit-card default is the human face of Gordon Brown’s decade of irresponsibility.’

Related posts:

  1. Consumers should budget to pay off credit card debt
  2. Some credit card interest rates may not be legal
  3. Drop in credit card delinquencies
  4. New measures in place for credit card users
  5. Consumers in UK cutting back on spending to try and get rid of card debt

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