Fewer Consumers Have Credit Card Debt but Interest Rates Rising, says Auriemma Consulting Group

LONDON--(Business Wire)--
Auriemma Consulting Group has published research that indicates that British
consumers are less likely to have credit card debt than they were before the
credit crunch. By the end of 2008, consumers users were 21% less likely to be
burdened by credit card debt than they were at the beginning of the year. In Q1
2008, 63% of British consumers carried balances on their credit cards. By the
end of 2008, the incidence of revolving debt on credit cards fell to just 50%.

As interest rates increased during 2008, consumers began taking steps to reduce
their debt exposure. In addition to a reduction in the number of credit card
users carrying a balance, the balances also decreased. In Q1 2008, the average
balance held by consumers with credit card debt was £1,651, nearly £200 more
than the amount reported in Q4 2008 (£1,453). During the same period, average
interest rates on credit cards increased 10% to an all-time high of 15.7%.

Megan Bramlette, the Managing Editor of Cardbeat, the publication that featured
the research, says, "Consumers proactively reducing their debt levels is
encouraging, especially given the uncertainty of the economy and that many
consumers are currently struggling to repay their debts. However, it must be
noted that though many consumers are reducing their debt, there are many others
are in worse shape than ever before, particularly due to the increased burden
felt by rising interest rates."

The research published in Cardbeat indicated that income was the primary
indicator of a consumer`s ability to repay their credit card debt. The average
balance held by lower income consumers (defined as those with household incomes
below £30,000) with credit card debt increased 23% over the course of 2008, from
£1,111 in Q1 to £1,366 in Q4. Consumers with household incomes exceeding £30,000
were focused on paying down their debt; their average debt burden fell 18% from
£2,448 to £2,006 during 2008.

About Cardbeat

Cardbeat is a syndicated market research service that tracks changes in consumer
attitudes towards topics that affect the payments industry. Cardbeat provides
subscribers with reliable data about what consumers are thinking, how they
behave and what motivates them. Subscribers are able to suggest new survey
topics, and the service is designed to accommodate new questions on short
notice. Cardbeat is published quarterly in the UK by the Auriemma Consulting
Group.

About Auriemma Consulting Group

Since 1984, ACG has offered comprehensive management consulting, research,
industry roundtable and benchmarking services to the financial services
industry. ACG clients include credit card issuers and networks, commercial
banks, auto and mortgage lenders, merchants, and industry vendors. With offices
in New York and London, ACG offers actionable solutions to help clients make
important business decisions to maximise their efficiencies and revenues.

Auriemma Consulting Group
Megan Bramlette, +44(0)207 629 0075
megan.bramlette@acg.net

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