British credit levels reaching boiling point
UK consumers have the potential to blow a staggering £253.6bn on their credit cards, according to Moneysupermarket.
While Brits already owe a disturbing £55.6bn on credit cards, the research shows this is small change compared to the further £198bn people could borrow if they chose to max out their cards. While 28% of people do not have credit cards, 9% have £20,000 or more available in credit.
Steve Willey, head of credit cards at Moneysupermarket, said: “The fact people could blow a quarter of a trillion pounds is alarming. This is surely a big wake-up call to all providers that they must take into account a person’s total potential debt when they apply for credit cards.
“It’s all well and good to give someone a £5,000 credit limit if they can afford it, but huge potential problems occur when that one person is given cards by many different providers each with a £5,000 limit.
“Some providers are acting responsibly by refusing applications due to a person’s total credit limit on all their cards, but others are still assessing things as though that person doesn’t have another card.
“In many countries, banks will give you a card on condition that you close a card with another provider. This is something the banks or Financial Services Authority need to consider.
“To have a further £198bn available to spend on credit is crazy. To put it into context, that is more than the Government spends annually on health and education put together.”