Anxiety over the levels of unsecured national debt has been reignited by a Barclaycard warning that its customers are defaulting on £1 out of every £5 that they owe.
Barclaycard is the largest and among the most aggressively marketed suppliers of unsecured credit in the UK.
In a trading statement issued by Barclays, the company warned that bad debts are growing at the same pace as 2005, when they rose by 44 per cent to £1.1 billion.
Taken over the course of the year, this could mean defaults as high as £1.6 billion, or almost a fifth of the £8.6 billion owed by customers who fail to cover monthly balances.
While the number of people failing to cover monthly costs is stable, the average amount they owe ñ and the amounts considered unrecoverable ñ are rising.
Barclays’ finance director Naguib Kheraj added that the stigma of failing to cover debts was also ceasing to motivate customers who regularly use balance transfer.
“Clearly, it’s more acceptable for people socially to default on their debts,” he told the Times.
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