Many people have struggled with credit card debt over the years, especially on credit cards that have charged high rates of interest and crippling charges. However, with the current financial situation in the state that it is in – where many consumers cannot switch to a more affordable card due to tight credit conditions, and where household finances are taking a real battering due to rising fuel, food, and living costs – it appears that an increasing number of cardholders are having to walk away from their credit card debt.

According to a recent report the level of repayments on capital and interest that credit card providers now no longer expect to receive from consumers has risen from 6.62% at the end of March to 6.9% by the end of June. Charge offs, which are repayments of the principle debt and interest, have been falling since 2005, so this latest data shows that there is now a reversal in the trend from the past few years. A charge off is a loan that is overdue by more than one hundred and eighty days.

However, whilst many consumers appear to be walking away from their credit card debt many others seem to be relying on their credit cards more and more according to the data, particularly in the current climate where affordability when it comes to household finances is overstretched. Results show that in the second quarter of this year borrowing on credit cards continued to rise. However, many credit card firms have tried to limit losses from these charge offs by increasing interest rates, increasing charges and fees, and cutting credit limits or accounts wherever deemed necessary.