Experts in the UK financial sector are expecting credit card companies across the UK to increase interest rates and increase charges as they try to claw back as much money as possible after a significant rise in bad debts. This is a situation which has been brewing for some time and one which will ultimately cost UK consumers, with those who are up-to-date with their payments more likely to suffer in the medium term.

This has been an ongoing situation in the UK credit card industry and one which in many ways has been self-fulfilling because as you squeeze customers harder to cover those who have defaulted on their loans, this automatically increases the number of additional customers defaulting on their payments. We will at some point reach a climax with regards to default numbers but at this moment in time there would appear to be still a significant amount of upside in the short to medium term.

The UK financial sector as a whole has been hit very hard by massive debt write-offs and even if the UK economy was to recover tomorrow, these write-offs would continue for some time to come. There is no quick fix or an overnight way out of this particular situation although increasing charges and interest rates on credit card debt is perhaps the least helpful of all the options available.

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