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A woman burdened with £10,000 in credit card debt shared her experience with BBC Panorama, revealing how a credit-rating company she trusted, believing it would assist in managing her finances, actually encouraged her to accumulate further debt. After signing up with the credit score provider Experian, she began receiving frequent emails promoting high-interest credit card offers when she was close to clearing her existing debt. This practice, consumer advocates warn, could exacerbate the financial difficulties faced by many vulnerable individuals in the UK who are already struggling to meet repayments.
Credit cards have become increasingly widespread, with around 35 million holders in the UK. Interest rates, including fees and charges, can vary dramatically, from 0% up to over 60%, though the average APR for people with typical credit histories is around 25%. Panorama spoke with people who described how lenders encouraged them to borrow more money, despite their fragile financial situations. One man detailed how his bank raised his credit limit while he was deeply in debt, exacerbated by a bipolar-related manic episode. Another individual, overwhelmed by debt amid job loss and personal upheaval, has resorted to selling his home.
The woman with £10,000 debt, known as Amanda and a mother of five receiving universal credit, eventually sought help from a debt charity and worked for years to regain control of her finances. She had regularly monitored her credit rating through Experian, finding the service initially useful as she received monthly updates on her financial status. However, as she neared paying off her debt, the emails shifted from simple credit report alerts to persistent promotional offers for credit-builder cards with steep interest rates. Amanda intended to keep only one card for emergencies, but was inundated with further offers encouraging her to take out multiple additional cards. What she was unaware of at the time was that Experian, the UK’s largest credit reference agency, earns commissions by marketing credit card products.
According to a survey by the Centre for Responsible Credit, more than half of nearly 3,500 low- to medium-income adults reported receiving
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