Monday 24th September, 2007 

It is interesting to see how the banks are handling their debt problems. With more and more people getting deeper into debt and attempting to resolve their problems through debt consolidation, debt management or by using an IVA specialist you would expect that the banks would be reviewing their lending criteria.

To date many high street banks have been accused of irresponsible lending but recent events such as the credit crunch and the Northern Rock run have caused banks to review their business models.

These problems, coupled with the UK's desire to spend more than they earn, has caused many high street banks to cut credit card limits and reject borrowers which don't fit their more stricter criteria.

Barclaycard is perhaps the most prominent bank to have taken such drastic action - tighten their belt - in the form of reducing the credit limit of half a million of its customers. Bad news also for those who want to borrow for the purpose of debt consolidation: Barclaycard are now rejecting half of all applications for credit cards and are also looking for signs of debt distress.

Many people who are struggling with their debt problems need early intervention in the form of debt help and advice to avoid the more serious consequences of their financial situation: bankruptcy and losing their house. This belt tightening by the banks will have a serious impact on those who are just managing to cope with their debt problems.

Barclaycard may well be the first of many high street banks which are reviewing their lending criteria. Should other high profile banks follow in their footsteps then those who have problems managing their debt will struggle: the more traditional routes of debt management, eg debt consolidation, being harder to access.

If you are in debt or worried about your financial situation help is at hand. Debtwatchdog will supply you with the facts about each option, (debt consolidation, debt management, IVA's) available to you. Complete our Statement of Affairs to help you assess how well you manage your finances.