News & Views - Savantor

Credit card debt levels

Wednesday, 16 January 2013

Recent studies have highlighted the extent to which cardholder debt has risen in the UK. Never mind still paying off Christmas 2012, almost one in five consumers have yet to pay off debts from Christmas 2011, according to new research from uSwitch.com. One in five borrowers are starting 2013 with over £5,000 of debt on their credit card. Christmas may be over for another year, but for the 59% of consumers who bought their presents on plastic in December, the debt hangover is likely to linger on.

The research also showed that:

        53% of consumers expect to take a year or more to pay off their credit card debt,

        15% say that it may take as long as three years to settle their balance.

        7% can't imagine clearing it at all.

        However, only 29% of consumers cut back on costs this Christmas.

        48% spent roughly the same as last year

        23% consumers spent more this year than last, with one in ten spending over £1,000.

Further research by Which? on 2,000 people throughout Britain showed that 46% used overdrafts, store cards and payday loans amongst others to cover the costs, while 36% used their savings. Around 25% said that the only way they could afford Christmas was by using bank overdrafts and credit cards. Of the people who used their savings they typically took out £380, while £301 was on average gained from those utilising credit. According to the British Bankers' Association families are paying back "virtually as much as they borrow" and this is despite an increase in mortgages on properties and people spending more on credit cards. The financial information company Markit produced similar results to those found by Which? Markit found that 75% of households expect their financial situation to become worse, or stay the same, over the next year.

It seems to be that a trend of last year with cardholders seeing the need to pay off their card debt is continuing and likely to do so for the next 12 months. That coupled with the recent glut of large retailers going into administration doesn’t paint a happy picture for the UK economy in general or card spend in particular. However, one bright note in the latest figures from UK Cards Associations shows year on year spend from November 2011 to November 2012 on debit cards up from £27.4bn to £28.7bn and on credit cards from £12.9bn to £13bn.

Savantor Services

Savantor Services

Savantor services are tailored to Client needs based on our core service areas

Specialist Resourcing Payments Strategy Platform Transition Operational Efficiency
Savantor Services

Job Opportunities

Consulting and contracting roles in the payments, mobile and banking arena within the UK and across Europe

View more
Savantor Services

Savantor Views

Find out more from our Savantor brochures, MarketEye back copies and Industry opinion

Collateral Market Eye News & Views Sign Up to receive MarketEye

Client Quotes

Complex Cards Business Transformation

"This was a major business transformation that required us to build an excellent team made up of internal bank specialists, supported by external card business, technical and operations expertise. Savantor provided specialists from the local market and with international experience to fill a variety of important roles. The Savantor resourcing team are professional, reliable and good people to work with."

Ricardo Gomez, Director - Operations & Technology - WiZink Bank - Spain

Complex Multi-Country Migration

"This complex migration, undertaken simultaneously in Spain and Portugal, has been a complete success. Savantor has provided us with excellent support for over 3 years, both in the original business transformation programme and now this double migration. We value their open and honest approach to business, and of course the expertise that they bring."

Ricardo Gomez, Director, Operations & Technology - WiZink Bank – Spain & Portugal

Business and Platform Strategy

"Savantor successfully advised Rabobank during preparing of the platform migration for cards. Savantor demonstrated thorough knowledge of business processes and market players combined with a practical approach."

Evert Fekkes, Business Information Manager - Rabobank - Nederland

Payment Specialists

"Working close with Savantor's professionals over the years in the payment arena. I appreciate the skills and knowledge these guys have and will surely engage with them when opportunities arise. The current engagement with Savantor is full to satisfaction and beyond."

Idsert Walta, Head of Banking Categories - Nordea - Scandinavia

Payments Platform Strategy and Sourcing

"We were in urgent need of external independent expertise to supplement our internal resources. Senior consultants had to quickly integrate with our team and actively contribute. Their experts quickly forged strong working relationships and delivered to our brief. We enjoyed working with them to develop our future platform strategy."

Evert R Fekkes, SVP - Payment & Savings Services - Rabobank Nederland

Acquiring market insight and strategy review

"Savantor brought an independent perspective and valuable insight that enabled Rabobank to ratify options for delivery and future growth and make informed business decisions in support of our target business model. Having used Savantor on a number of strategic projects, we have no hesitation in recommending their services to others."

Evert R Fekkes, SVP Payment & Savings Services - Rabobank - Nederland

Payments Workshop Material

"Savantor helped ACI build a payments onboarding workshop for new technical staff in ACI EMEA. Their extensive experience took our outline and built a great starting presentation of industry facts that we have now customised further into a half day session that is used for all new joiners. Our Americas and APAC regions have also taken the material and customised it for their regions. A great job by Savantor has meant new joiners to ACI hit the ground running."

Richard Sanders, Principal Solution Consultant - ACI - Worldwide EMEA

Card Processing Migration

"Disciplined methodology and effective teamwork, guided by Savantor's migration expertise and operational knowledge, were the hallmarks that led to the resounding success of this project, enabling us to maintain and develop our business capability."

Robert Lambert, Head of Cards Strategy - Permanent tsb bank - Ireland

Clients - Request Support

Send us a support request and one of our specialists will be in contact to assist you.

Consultants – Upload your CV

Register your CV with us and gain access to a range of job opportunities through our online job search portal.