May 25, 2006

By Peter Kenny

Rising bad debts continue to trouble Barclaycard as the banking giant, Barclays, announce strong growth in the first quarter.

Figures released by Barclay Bank show that their credit card arm, Barclaycard, increased income but at the same time suffered a rise in bad debts.

The Barclaycard figures show that debts grew by 44% to a total of £1.1 billion for the full year. This growth matches the same rise the previous year.

Barclaycard now has 11.2 million cardholders in the UK with another 3.7 million issued internationally.

The same time last year Barclays said that bad debt was rising faster than what was previously expected.

Back in February the Barclaycard chairman, Gary Hoffman said, “The credit card business is cyclical and we are going through a downturn. We have changed some of our policies in underwriting, reduced credit limits and tightened lending criteria."

This certainly seems to be happening, as there are reports that seem to indicate that Barclaycard is certainly tightening up on their credit card applications, with many applicants being turned down. At the same time many Barclaycard holders are having their credit limits slashed. These actions seem to back up what Gary Hoffman stated back in February.