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Banks 'may have to prepare for a spate of delinquencies'
As credit card losses mount around the world, financial institutions must prepare themselves for customers struggling to make repayments, according to new figures.
The Citizens Advice Bureau (CAB) has handled over 400,000 calls in the last year on credit card debts and repayment as the credit situation has worsened over the last few months.
Tom Howard, a spokesperson for Consumer Credit Counselling Service (CCCS), said that a sure sign of a credit problem is when consumers are shifting their debts from card to card.
Mr Howard warned that consumers must confront their financial predicament and rectify it as soon as they possibly can.
He said: "Your first step should be to make a strict and truthful budget that will set out your finances and help you see where you are overspending, can cut back, and such like."
A report from the International Monetary Fund published in April estimates that around seven per cent of consumer debt in the UK will be written off as consumers are left unable to pay off their debts.
New figures from the CAB show that debt remained the biggest volume of enquiries for the service with 1.93 million new debt problems advised on by bureaux, an 11 per cent increase on 2007/8.