A report by leading accountants Price Waterhouse Coopers (PWC) certainly thinks so.
Simon Westcott, director in PwC’s Financial Services practice has compiled a fantastic report on the changing financial landscape. The report is titled “Precious Plastic 2012″.
In what can only be described as going back to basics, the Amercian credit card giants seem to be packing up and going home, as consumers choose to cut up the high-charging plastic.
The largest US credit card companies, MBNA and Capital One, are taking such a battering from the PPI mis-selling scandal and rising bad debts, that for the foreseeable future it will be unprofitable to operate in the UK.
Access to easy credit, which fueled the UK’s boom to bust situation, has now been brought under control. It’s now seen to be bad practice for banks and finance houses to be dishing out credit cards like sweeties. This has massively reduced outstanding credit card debts;
“Total outstanding credit card debt fell by 5% in 2011, leaving the average credit card balance at around £1000. Credit cards have lost market share to other payment types – most notably debit cards which have grown by 10% “
The paragraph above which was taken from the report is a trend we expect to see continue.
“In addition, as consumers turn away from credit cards or are unable to obtain credit from mainstream lenders, there is increasing evidence of consumers seeking alternatives such as so called “pay-day loans”.”
The banks need to watch out, a new type of lender is on the street, and they are not pretty, credit cards being replaced by pay day lenders, good or bad? You decide.
Which ever way you look at it, lenders are here to rip off the people who are most vulnerable, whether it be loans or credit cards. There should be a cap on the apr that these people charge. It s the rich breaking the poor as usual, i don t know how they sleep at night, but its a sure thing, what goes around comes around, i have seen it.