Christmas Spenders May Feel Credit Crunch

Posted 2007-11-26

PriceWaterhouseCooper have released their “Precious Plastic 2008” report, and company accountants suggest a tightening of consumer credit in response to increasing debt loads and unrecoverable loans. 

The firm predicts that credit card providers will see a decline in profits as more and more borrowers find it impossible to make payments on their debt.  Increased competition in the industry will compound the sector’s troubles. 

Credit companies have already lost nearly £4 billion, and PwC believes this will contribute to a substantial number of credit application rejections this season. 

The report indicates that the average adult owes approximately £33,000 in unsecured loans, double the amount in 2000. 

The rise in consumer debt is forcing banks to tighten their lending standards, according to Richard Thompson of PwC. 

He fears that many consumers will find it difficult to obtain credit in the months before Christmas.

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