- 26
- Sep
- 07
Britain’s personal debt is on the increase at an estimated rate of £1m every 4 minutes. At the end of July 2007, it had reached a massive 1.3 trillion pounds. Lending companies are becoming more aware of the growing problem and are starting to take precautions. Barclays are one of the first leading lending companies to take action. They have reduced the amount consumers can borrow, not just with new customers but with existing one too. Over 500,000 customers have either been given limited amounts or been turned down all together, as lending criteria has been made more difficult. Customers who have been given limited amounts can increase the amount borrowed by proving they can cope with the debt. Cash withdrawals have also been limited.
All these things have been put in place to help cut the amount of bad debt there is, as many people struggle to pay the money back. Research carried out by Moneysupermarket shows that over 12.7m people have taken out loans to consolidate their debts, however 8.4m people just end up increasing the amount they had in the first place.
It has been made easier for lending companies to keep track on individuals financial activates as they can now share data between lending companies, through the new industry database, it provides them with information about the credit rating for each individual, it also shows if they are applying for multiply cards, which can indicate they are having debt problems.
It won’t be long until other lending companies take on board the issues of the ever increasing debt problems Britain is facing.
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