Financial sector experts are predicting increases in interest rates and charges by credit card companies as they attempt to offset their debt recovery requirements by trying to claw back as much money as possible after seeing a significant increase in the amount of bad debt. The expected move is not coming as a surprise to many as talk about it has been ongoing for some time and is move that will ultimately cost UK consumers, with those who are up-to-date with their payments more likely to suffer in the medium term.

This has been an ongoing situation for some time within the UK credit card industry and in many ways, it has been a self-fulfilling situation as customers who have been squeezed to offset the costs of those who default and miss payments are finding that they are then defaulting and increasing the debt collection requirements cycle. At some point there will inevitably be a balance point reached in respect of default numbers but for the time being it would seem that there is still a large amount of upside for the short and medium terms.

The UK financial sector has been severely damaged by the large amount of write offs of bad debt and, even if the economy were to recover tomorrow, the write offs would still continue for some time and, of course, bring with them a knock on effect for quite some time. There is no quick fix or overnight way out of this particular situation, and interest rate increases n credit cards is probably the last helpful of all options available.