£1.5bn of debt to be erased by Barclays
Published On 29 November 2006
As Barclays Bank yesterday announced it was heading for annual profits of £7 billion, its credit card offshoot Barclaycard also said it believed its customers would default on a previously unheard of £1.5 billion of debt this year.Barclays said rising numbers of individual voluntary arrangements (IVAs) and personal insolvencies were contributing to the £1.5 billion of unmanageable debt.
There are around 11.2 million Barclaycard cardholders in the UK with around £25 billion lent out at any one time.
The second half of 2006 has seen Barclays cancelling debts owed by personal loan and credit card customers to the tune of £31 million a week.
Last year saw Barclaycard customers default on £1.1 billion of debt.
The problem of debt in the UK has been spiralling this year with the write-off rate increasing from £19.5 million a week to £22.7 million and £26.8 in the previous three quarters of the year.
By writing off the £1.5 billion of debt, Barclaycard is resigned to losing the equivalent of £140 for every cardholder in Britain.
