Consumer debt: Small banks in the US have suffered a jump in missed credit card payments
Small banks in the US have suffered a jump in missed credit card payments as consumers are overwhelmed by debt.
Around 7.2 per cent of outstanding card balances were written off at minor lenders in the last three months of 2017 because their customers could not pay, according to Federal Reserve data.
This is up from 4.5 per cent earlier in the year and close to its highest level since the aftermath of the financial crisis.
It is likely to alarm regulators who are hoping that rising interest rates after a decade of cheap credit do not cause mass defaults.
And there will be fears that the UK could see similar problems –with the Bank of England widely expected to hike rates from 0.5 per cent to 0.75 per cent in May.
In Britain, watchdogs have branded the consumer credit market a pocket of risk and sought to rein in reckless lending.
However, there is so far no sign of a big uptick in UK customers who are unable to pay their credit card bills.