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Rising bad debt could end free banking in the UK

Thu, 03 Aug 2006

The rising amount of bad debt in the UK could put free banking at risk, according to an expert.

moneysupermarket claims that as more borrowers have mounting debts such as credit cards and personal loans, many organisations could end free banking for their customers.

Richard Mason, director of moneysupermarket, comments: "The resulting impact will be further cost for the UK's 31 million current account customers who are long used to free banking."

He adds that it will be a "sad day" when banks opt to charge for running the "most basic and necessary" of financial services .

Furthermore, Mr Mason predicts a possible backlash for the first banking which chooses to enforce a charge.

The figures provided by moneysupermarket indicate that UK personal debt , such as credit cards and personal loans, is rising at a "tremendous rate", having recently reached £1.19 trillion by the end of April 2006.

However, the latest figures released by the Bank of England show that there was very little rise in credit card lending in June 2006, although the total increase in consumer credit was £0.8 billion.

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