Even though the bank increased revenues by 15 per cent last year, bad debt charges have soared by 44 per cent and experts expect a similar pattern this year.
“The general industry trend is that defaults are increasing, competitive pressure is strong and the regulatory machine continues to whirl,” Richard Thompson, a partner at accountancy firm PricewaterhouseCoopers, told Reuters.
“We don’t see any immediate relief in defaults.”
Barclaycard was launched in 1966 and was originally aimed at a million customers who could only spend £100 and had to repay their balance in full each month.
Now with 1,300 providers and 70 million cards in circulation not requiring full repayment each month, credit card debt levels have soared to an average of £4,000 per adult.
This has contributed to a rise in bad debt charges in the UK such that Barclaycard, while celebrating 40 years in the country, is looking abroad to nations with fewer debt problems to secure its future.