Related Credit Card Article

"Credit card providers to face tough year in 2010"

By Reno | June 18th, 2010 | General

According to recent reports the credit card industry could be in for another tough year this year, with some officials predicting that credit card borrowing is going to continue to decline. Credit card firms already experienced a tough time last year, with consumers cutting back on their credit card usage as a result of the recession.

It has now been suggested that the decline in credit card usage that was seen last year could continue over the course of this year, and this means that credit card firms could be in for a challenging time. The suggestions come from the latest UK Plastic Cards report from Datamonitor. Reduced borrowing coupled with the bad debts stemming from struggling consumers being unable to keep up with repayments have all taken their toll on credit card firms.

The report suggested that last year was one of the toughest years ever experienced by credit card providers, and that the impact of the recession will continue to take its toll on credit card borrowing in the UK. However, the report also said that the markets were showing signs of improvements, and that credit card firms now needed to return to a lending strategy.

The figures outlined in the report from Datamonitor suggested that the credit card market could decline by around 2.7 percent this year before it returned to growth levels in 2011, when it is expected to enjoy growth of around 2.5 percent as economic improvements lead to increased credit card borrowing.

The report stated: “High unemployment, economic uncertainty and record levels of credit card write-offs have led to a sharp shock for the industry. The worst of the recession appears to be over, as the market shows its first signs of improvement. Issuers need to now return to a lending strategy.”

Tags: finance, credit card, Credit Cards, Datamonitor

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