Report predicts wholesale changes to credit card market

Tuesday, November 10th 2009

The UK credit card market is likely to see major changes over the next few years, according to a new report.

PricewaterhouseCoopers (PwC) says that higher APRs will probably become the norm in the future, as will the reintroduction of annual fees.

It suggests that consumers will pay for premium benefits at the higher end of the market, while some customers at the lower end may have to fork out to use a standard credit card.

"Large scale change within the sector over the next few years is inevitable. We're likely to see credit cards being reinvented as payment rather than borrowing tools," comments Richard Thompson, partner at PwC.

The company notes that while Britons have slowed their credit card borrowing somewhat during the recession, overall personal debt levels are still high when compared with the rest of Europe.

According to Credit Action, total UK personal debt was worth £1,459 billion at the end of September.

Each UK adult now borrows £4,745 through credit cards, motor and retail finance deals, overdrafts and unsecured personal loans.