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Credit Card Spending Falls By £4 Billion

News that credit card spending in the UK fell by £4 billion in the first half of 2008, compared to 2007, has been well received by consumer protection groups. However, the tougher market conditions do not bode well for the finance industry with profits under severe pressure and more people struggling to cover their monthly payments than ever before.

We have seen a number of credit card companies issue warnings about the state of the market and also put aside funds for problem accounts, but this is only the tip of the iceberg. Much of the affect of a stalling economy has yet to hit home and the next 12 months will see more bankruptcies, more IVAs and more credit card customers defaulting on payments.

The credit card industry has come in for some flak of late with news of additional charges, increased interest rates and stricter repayment terms for some customers. This is all at a time when consumers probably need more help than ever before, not pressure. Quite how this will pan out in the medium term remains to be seen but more and more customers will no doubt be contacting their credit card providers about new repayment terms and possible refinancing of debts.

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