Predicted credit card changes 'could increase debt'

Wednesday, November 11th 2009

Higher APRs and more annual fees on credit cards are likely to lead to more debt and insolvencies, an expert has warned.

Commenting on a recent PricewaterhouseCoopers (PwC) report predicting that credit cards will carry more fees in the future, David Rodgers of the Debt Advice Foundation said such changes will result in consumers having to pay more interest rather than being able to switch to zero per cent deals.

However, he added that Britons have started to spend less on their credit cards as a result of the recession, although he would like to see those who are struggling with their finances ask for help sooner.

"For people who are already struggling to repay their debts we recommend they seek expert advice and understand the options available to them," Mr Rodgers remarked.

The PwC report also predicted that consumers are likely to spend £5,000 in the next 12 months to pay back the interest accrued on existing debts.